China announced a new subsidy for solar power plants
- From: -=DirtBag© <Dirt@xxxxxxxxx>
- Date: Tue, 21 Jul 2009 10:56:11 -0700
DJ Solar Companies Jump As China Announces New Subsidy
Heres the poop:
It means that the present glut of solar products will start getting used up. US Companies with a good footprint in CHINA will start moving product and those producing in China will be in position to move there's locally and not have the costs associated with shipping world wide etc.
Currently there is a glut of panels. (Germany was the driving force until the last year after they cut solar subsidy's.) From this a glut started. They are talking about filling the desert in AZ with solar panels.. Only takes a few big projects and Solar profits will snap back.
Note:
Some analysts wonder if this China 50% subsidy for solar plants will take up up this slack. Companies like China solar player YGE should do well in any event IMO.
....and ESLR (I knew you were wondering about my favorite future Solar play) ESLR has a great China relationship and is building a new production facility there...
They (ESLR) have the cheapest cost per power watt. With their proprietary STRING RIBBON Technology..
They have a new online facility in Devon, Mass. that is ripping them out to fill a couple huge contracts in China..
They have been setting up a production facility in China to build the panels from Ribbons manufactured at the Devon, Mass manufacturing plant. This way they can ship cheaper and use China labor on the China panels thus they get a favored trading status with the China in this Solar expansion.
China lacks infrastructure badly outside the cities. The provinces are still stone age compared to areas around cities like Shanghai. You need to understand how Bad of infrastructure there is in China. It is these areas that will be getting serviced in the future and they are HUGE areas.. China is putting in all kinds of Power including Nuke power.
Heres the article off the WSJ
..
By Shara Tibken Off DOW JONES NEWSWIRES NEW YORK (Dow Jones)
--Shares of solar companies jumped Tuesday after China announced a new subsidy for solar power plants. Ê China's Ministry of Finance said it plans to offer a 50% subsidy for solar power plants and a 70% subsidy for plants in rural regions. The funding is for model or demonstration projects up to 20 megawatts in each of its provinces. Ê "Clearly a lot of people are thinking that one way or another China is going to build its domestic solar industry," Jefferies & Co. analyst Paul Clegg said in an interview. "That could be a good thing for the companies and the industry overall because it would create one more market out there to take capacity going online." Ê Clegg said there's currently an oversupply of capacity in the marketplace, but he and other analysts warned the newest Chinese subsidy isn't enough to alleviate the problem. Ê In recent trading, Suntech Power Holdings Co. (STP) climbed 9.2% to $17.68, while Yingli Green Energy Holding Co. (YGE) gained 8.5% to $12.37. LDK Solar Co. (LDK) jumped 9.3% to $10.33, and Trina Solar Ltd. (TSL) increased 4.2% to $27.50. JA Solar Holdings Co. (JASO) edged up 2.6% to $4.68. Ê The announcement Tuesday is the latest in China's move to expand solar energy. In March, it announced a subsidy for rooftop projects, and many analysts have said they expect further subsides to be offered, including a possible national feed-in tariff where utilities buy energy from the solar plants for a specified period. Ê Cowen & Co. analyst Robert W. Stone said he expects China to become one of the top three markets for solar power by 2011. Ê He said the latest news is good for Chinese solar companies as it could give them a larger domestic market along with growing share in the export market. Ê "Then the indirect benefit to the rest of the solar companies is the fact that incremental demand out of China could help absorb some of the excess silicon supply," Stone said in an interview. Ê Jefferies' Clegg said that while shares are trading up on the news, when people dig into the details, they might not be as enthusiastic. Ê "We believe that either returns on projects wouldn't be high enough to really attract a lot of capital, or prices at which the companies have to sell equipment like solar panels would be very low," Clegg said. Ê In addition, Raymond James analyst Pavel Molchanov said the stock reaction Tuesday is "more of a sentiment reaction that a substantive reaction." Ê He said China's newest program - which would provide subsidies for about 440MW of installations over three years - seems large in comparison with the 100MW it had installed by the end of 2008, but it's small compared with Germany's growth rate of about 1500MW this year alone and when considering that China accounts for close to half of all solar power manufacturing worldwide. Ê "The bottom line is that it's a meaningful program relative to the small size of the Chinese solar market today, but it barely makes a dent in the enormous volumes of solar modules being produced by Chinese manufacturers," Molchanov said, adding the program isn't going to "transform the supply and demand fundamentals of the market."
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