China Solar Stocks: Details Emerge on Subsidy Plans

There are some new details emerging on China’s plans to provide incentives to its solar sector.

• First, there is some additional clarity on the structure of China’s plan to provide an incentive of close to $3/watt for commercial solar installations. According to Barclays Capital analyst Vishal Shah, the Chinese Ministry of Finance clarified that the announced subsidy is for BIPV (building integrated photovoltaic) projects, with a lower but so far unspecified subsidy to be offered for rooftop applications. According to Shah, the ministry said the timeline and amount of incentives by application will be announced at a later date.
• On the $30 billion green stimulus package that had solar stocks hopping Tuesday, apparently the program is old news: Shah notes that the Wall Street Journal reported on March 9 that China’s stimulus program would include $30 billion for green energy programs. Shah said that his checks suggest that contrary to speculation yesterday, no additional incentive plan is in the works beyond the $30 billion announced in early March.
• Piper Jaffray’s Jesse Pichel, who helped trigger Tuesday’s solar stock rally with his report on the $30 billion China stimulus package, notes Wednesday that you can read a description of the government’s intentions on the National Development and Reform Commission’s web site (or at least, you can if you can read Mandarin.)
• Pichel also notes that China’s Department of Construction issued an FAQ on the solar subsidy plan, which he said indicated that there will be a cap on the program of so-far-undetermined size, and that the proposed 20RMB/watt (or about $3/watt) subsidy would be “the best case scenario,” with final amounts to be determined on a cash-by-case basis. He says that “there was a misunderstanding that this subsidy would have no cap and [that] 20RMB/watt is set in stone.”

Finally, one other note: in the latest sign that cost pressures are hitting the solar sector, BP Solar Tuesday said it is cutting 620 people at its manufacturing facilities in Frederick, Maryland and Madrid, Spain. The plant in Spain will lose 480 of 575 positions while the Frederick plant will lose 140 of 600.

Almost all of the solar stocks are once again trading higher Wednesday.

Original post

Comments

[tessant:]

savitz strikes again!
ill take the BIPV - makes my STP play even STRONGER!!!!!

Apr 01 05:12 PM

[Gregory Pepin:]

Let's hope at least analyst will be honest.
They said that on the overall market, subsidy will be lower for Solar project.
Right now it proves that it isn't the case as China will subsidy too the industry.

Apr 02 08:35 AM

[tginomorebush:]

What a crock of cr@p .......... this is all old news ...... brought back by savage savitz with another negative spin to short solar!

Dear Alpha: Please reconsider barrons and savitz as bloggers and anal-ysts. Please reread the posts of this anal-ysts ..... and see if he is fair and impartial .......... every post is a negative spin!

Apr 02 08:40 AM

[gebby:]

just love the way you have to correct the story towards the negative. everyone knows citibank and barrons are not supporters of alternative energy. the real story is why?

Apr 02 10:04 AM

[Road Runner:]

Everyone needs to lighten up on Eric Savitz. Solar sucks right now and will probably for a while.

You posters may not realize it but you are acting the same way many posters act about other stocks. You want to hear nothing but good news for stocks you own, so you verbally abuse anyone that says anything less than rosy. I owned some XM satellite radio stock for a while and followed the board postings. Posters who were less than rosy were ridiculed. The boards turned into cheerleading sites. Luckily I got spooked when they had accounting irregularities a few years ago and sold with a small profit.

Apr 02 06:54 PM

[Perry B:]

good comment road runner. Gebby what is the real story behind citi and Barrons. You seem to be on to some news. That would be a good story. I think today solar will shine.

Apr 23 09:26 AM