The start of another bubble in solar?

The world’s top energy consumer, China, announced that it will up its installed solar power capacity this year to 10 gigawatts (GW) from the original planned 7 GW. China is facing a real problem of having extended billions of dollars in credit and subsidies to its solar panel manufacturing industry and that industry now can’t find buyers for all those panels as solar subsidies in North America and Europe have been disappearing. Not to mention the tariffs in the U.S. and a major pending trade case with the EU. Panel prices fell by 30 percent last year.
So the Chinese government’s move to force Chinese utilities to absorb some of those panels in the Chinese domestic market makes obvious sense. But what’s more of a question is whether the local Chinese market can make enough of a dent to slow the decline of panel prices. Share of Trina Soalr and Yingli Green Energy rose more than 7 percent in morning trading and if you look at the MAC Solar Index, it’s up almost 40 percent since mid-November.
But is this another bubble? In the Reuters article Morningstar analyst Stephen Simko says that “The solar stock run up is not justified at all based on the reality that all these companies still have no means of making money in 2013.”
Moving the Chinese solar target for 2013 to 10 GW is an effective subsidy for the market but it doesn’t really change the global pricing problem, which has created a market where panels are selling close to or below cost. The Chinese government’s move will prop up some of those Chinese solar manufacturers and may hold off a few bankruptcies but with North America and European solar markets constrained, I’m expecting more rough waters for Chinese manufacturers.

Solyndra seeks $1.5B in antitrust suit against Chinese rivals

Solyndra may not be a player in the solar market anymore, but it’s making new headlines with its latest lawsuit against Chinese companies, which it says have colluded to sell solar panels at below cost and drive competitors out of business.

Today in Cleantech

The news this week that Chinese solar giant Suntech may be a victim of a $690 million fraud is something out of a Hollywood thriller. The story goes that Suntech extended $690 million of credit toward GSF Capital, which in turn managed companies that were buying hundreds of millions of dollars of Suntech PV panels. As collateral, GSF put up $690 million in German government bonds. And that’s where the hitch is. In a call, Suntech’s CFO David King said, “the original documentation provided to Suntech may have been fabricated and the German government bonds may not have existed.” Whoops. Suntech’s share price has been hammered, down 20 percent, as have the share prices of other Chinese solar makers, including Trina and Yingli. From Solyndra to Suntech, someone is going to write a book about the solar gold rush, and some of the hijinks that occurred.

Why consumers shouldn’t worry about the new solar tariffs

The federal government’s decision yesterday to slap fairly hefty tariffs on Chinese solar panels has prompted worries about a big rise in costs for consumers to go solar. But the impact will not likely be as significant for two reasons.

The global solar industry aims at Japan

Japan plans to close its last nuclear reactor this weekend, a move that will take nuclear power out of its energy supply for the first time since 1966. Among those who will celebrate that will be solar companies as Japan gets ready to boost its renewable energy production and opens up its market more to non-Japanese players.

Today in Cleantech

The jockeying is beginning to call the bottom of the solar market. After an awful 2011, Gordon Johnson, an analyst at Axiom Capital who foresaw in 2010 some of the troubles headed to solar, has upgraded First Solar, Trina Solar, Yingli, Power-one and Suntech.  At the same time, Matt Feinstein from Lux Research, has laid out his six companies that he sees on the chopping block, from Solarworld to Suntech, one of the companies Feinstein and Johnson don’t see eye to eye on. I’ve been watching MidAmerican Energy, Warren Buffet’s utility jewel at Berkshire, because the company has begun to aggressively purchase solar projects, meaning some investors are starting to see value whereas others only see more calamity.  Johnson points to potential supply constraints for PV panels in Germany, and even if there’s anecdotal evidence of that, I have a hard time seeing the oversupply issue going away in Europe, given the subsidy crash there. That said, both Johnson and Feinstein point to opportunities in India and China, where I think the real rebound in solar will come from.

DuPont buys solar ink maker Innovalight

DuPont announced on Monday that it has bought Innovalight, a Silicon Valley startup that makes silicon ink that solar-cell makers can use to improve the amount of electricity that the cells can squeeze out of sunlight. DuPont declined to disclose the purchase price.

Gloomy News for the Solar Earning’s Season

SunPower plans to discuss its first-quarter earnings tomorrow, and it’s likely to repeat the same sentiment expressed by fellow manufactures over the past week: Policy change in Italy, its biggest market, caused a slow start for its sales in 2011.

Today in Cleantech

Where will the shifting supply-demand curve take renewable energy in 2011? That question is being raised this week in advance of the fourth-quarter earnings calls of several solar giants — SunPower and Yingli Green Energy Holdings later this week, and First Solar, Q-Cells and JA Solar later this month. Analysts have been predicting less-than stellar 2011 projections, given the consistent downward pressure on module prices combined with shrinking government supports in Germany and France, as well as a potential bubble in Italy. Most hopes are on the United States, where growth could help cushion the European slowdown. At the same time, the ferocious price competition in solar panels — down more than half since 2007 — is making solar power less expensive compared to fossil fuel-fired resources like coal and natural gas. A similar path is being taken in wind power, where turbine prices have fallen to five-year lows in recent months. What’s hard for solar panel and wind turbine manufacturers can be good for solar and wind power developers, up to a point.

Ditch Solar Manufacturing, Look to Software, Services

Where can solar startups find opportunities when their playground is increasingly dominated by giants from other industries? That’s a question that some Silicon Valley solar company executives and investors have pondered for some time now. The answers are software and services.