Until solar can prove it can stand on its own in the free market, the share prices of the companies will continue to be cheap, as is the case with Suntech Power Holdings (NYSE:STP), Yingli Green Energy (NYSE:YGE), Power-One Inc (NASDAQ:PWER) and Canadian Solar (NASDAQ:CSIQ), which closed mixed Monday.
The major problem with solar is everyone knows it isn't determined by consumer demand, but on government interference and strategies; something that never ends well.
Another major challenge for solar are the assumptions somehow it's going to solve its problems by some type of future invention. People that say this (and they're many) are just true believers and almost religiously want solar to work with a fervor that only the faithful can match.
That's why when you hear those proponents of solar talk about it, it's predicated largely on wishful thinking and faith in some unforeseeable future, rather than the supply and demand of the marketplace.
Solar would become more attractive if it was cut from the governments around the world and allowed to compete against other energy sources. Then they can prove if they are contenders or pretenders. At this time, most investors believe they're pretenders, as evidenced by their weak performances and share prices.
Solar companies will continue to trading at earnings multiples that reflect companies that are in decline until that becomes the reality.
With that unlikely to happen, and some governments like Germany and Italy backing off some of their commitments, it's doubtful the extremely expensive and unreliable energy source, along with solar companies, will be viable any time soon, if ever.
Showing posts with label Power One. Show all posts
Showing posts with label Power One. Show all posts
Tuesday, April 26, 2011
Thursday, April 21, 2011
ReneSola (SOL) (STP) (PWER) (SPWRA) Close Up on Nuclear Perceptions
Solar companies have been jumping on the perception it's going to benefit from the troubled nuclear plant in Japan crippled by the massive earthquake. Companies like ReneSola (NYSE:SOL), Suntech Power Holdings (NYSE:STP), SunPower Corporation (NASDAQ:SPWRA) and Power-One Inc (NASDAQ:PWER) closed up Wednesday on those assumptions.
While there will be a temporary boost in the interest in so-called alternative energy, it will never be more than a fad and at the very best, a weak supplement to real energy sources that can handle demand. Natural gas will be one of the legitimate energy sources of the future when prices rebound. That will take time.
Investors will make money in solar in the short-term, as the media will continue to hit the solar thing hard because of its darling status with it.
But anyone who believes nuclear and coal-generated electricity is going away will suffer at best if they made investment decisions based on it.
Could you imagine Japan counting on solar energy and then has some cloudy days. Sorry about the blackouts and parts shortages around the world people. When the fantasy generated by the media ends, the solar stocks will come crashing back down to earth.
Power-One Inc. closed Wednesday at $7.56, gaining $0.32, or 4.42 percent. SunPower Corporation closed at $15.29, rising $0.03, or 0.20 percent. Suntech Power Holdings ended the session at $8.95, up $0.30, or 3.47. ReneSola closed at $9.27, increasing $0.43, or 4.86 percent.
While there will be a temporary boost in the interest in so-called alternative energy, it will never be more than a fad and at the very best, a weak supplement to real energy sources that can handle demand. Natural gas will be one of the legitimate energy sources of the future when prices rebound. That will take time.
Investors will make money in solar in the short-term, as the media will continue to hit the solar thing hard because of its darling status with it.
But anyone who believes nuclear and coal-generated electricity is going away will suffer at best if they made investment decisions based on it.
Could you imagine Japan counting on solar energy and then has some cloudy days. Sorry about the blackouts and parts shortages around the world people. When the fantasy generated by the media ends, the solar stocks will come crashing back down to earth.
Power-One Inc. closed Wednesday at $7.56, gaining $0.32, or 4.42 percent. SunPower Corporation closed at $15.29, rising $0.03, or 0.20 percent. Suntech Power Holdings ended the session at $8.95, up $0.30, or 3.47. ReneSola closed at $9.27, increasing $0.43, or 4.86 percent.
Wednesday, April 6, 2011
Solar Industry (FSLR)(STP)(YGE)(TSL)(JASO) At Crossroads
There is no doubt we're rapidly approaching a day or reckoning for the solar industry, where solar companies like Trina Solar (NYSE:TSL), GT Solar International (NASDAQ:SOLR), JA Solar (NASDAQ:JASO), LDK Solar (NYSE:LDK), Renesola (NYSE:SOL), SunPower Corporation (NASDAQ:SPWRA), Jinko Solar (NYSE:JKS) and Power-One Inc (NASDAQ:PWER), among others, will be battling it out for survival.
Several things guarantee this, including the inability of government to continue to afford to subsidize the dubious industry, which only exists because of government elites and the wealthy, and not because of general consumer demand.
Even with the enormous amount of capital subsidizing the industry, it still remains extremely expensive after a number of years of attempting to lower the costs.
With the low market demand for solar, companies are still fighting to gain share in the sector and are set to boost production capacity at the time subsidies are being trimmed.
That means a large number of solar panels will hit the market, which will mean pressure on margins and earnings for the majority of solar companies around the world.
There can be no doubt this will end up with some solar companies not able to compete or survive.
That's good, as the industry needs to be completely untethered from governments in order to see if they can survive, and if there in fact is legitimate demand for solar.
Until that happens (which is coming), we won't know the real health of the sector because of government interference which is propping up an industry without knowing if it is in fact viable or not.
Either way, solar companies are going to come under increasing pressure as the European market dries up from the out-of-control debt which is threatening to bring down the European Union and the euro.
Solar is quickly losing its priority status and being dropped quickly from the things that are deemed necessary by governments, which are essentially bankrupt.
That will result in solar companies competing in more of a market atmosphere than they have in the past, which is probably not good for most companies that almost completely relied on taxpayers to survive.
Several things guarantee this, including the inability of government to continue to afford to subsidize the dubious industry, which only exists because of government elites and the wealthy, and not because of general consumer demand.
Even with the enormous amount of capital subsidizing the industry, it still remains extremely expensive after a number of years of attempting to lower the costs.
With the low market demand for solar, companies are still fighting to gain share in the sector and are set to boost production capacity at the time subsidies are being trimmed.
That means a large number of solar panels will hit the market, which will mean pressure on margins and earnings for the majority of solar companies around the world.
There can be no doubt this will end up with some solar companies not able to compete or survive.
That's good, as the industry needs to be completely untethered from governments in order to see if they can survive, and if there in fact is legitimate demand for solar.
Until that happens (which is coming), we won't know the real health of the sector because of government interference which is propping up an industry without knowing if it is in fact viable or not.
Either way, solar companies are going to come under increasing pressure as the European market dries up from the out-of-control debt which is threatening to bring down the European Union and the euro.
Solar is quickly losing its priority status and being dropped quickly from the things that are deemed necessary by governments, which are essentially bankrupt.
That will result in solar companies competing in more of a market atmosphere than they have in the past, which is probably not good for most companies that almost completely relied on taxpayers to survive.
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