Renewable Energy Investors: All Eyes on Crude and China

 |  Includes: JASO, LDK, SOL, STP, TSL, YGE
by: Kelvin Schulle

In the coming two weeks, we are going to see new development to impact renewable energy industry: rising crude price and China. Over the weekend, crude jumped 6% to over $91 as tensions escalate in northern Africa. Investors are betting on short term supply interruption. This could be a catalyst for renewable energy, especially solar energy, to become more attractive to alternative investors. The high price of crude is likely going to stay and climb further higher as the world economy continues to improve.

On the other hand, investors likely pay more attention to China's Eleventh National People's Congress meeting on March 2nd and CPPCC National Commitee meeting on March 3. The NPC meeting will pass the nation's 12th 5-year strategic plan, the passage marks a final step for the bill to take effect. China's 12th 5-year plan emphasizes the new energy policy and renewable energy development will be the key to China's energy security for the next decade. Solar energy and nuclear energy are two major components of the big puzzle. China has invested billions of dollars in solar space and also built nuclear power plants cross the nation in recent years.

It is estimated that the China's solar market is bigger than Germany by 2013. Solar companies such as LDK solar (NYSE:LDK), Suntech Power (NYSE:STP), ReneSola (NYSE:SOL), Trina Solar (NYSE:TSL), Yingli Green (NYSE:YGE), JA Solar (NASDAQ:JASO) are seeing strong demand of their products. Most of the polysilicon, wafers and modules have been sold out, the uprising demand is not because of rising oil d price, its mainly because the demand is picking up globally according to an iSuppli research. China's market is not even in the picture yet. So expect more demand come in streamline in 2011 and beyond.

LDK solar recently completed a new 1.6GW solar module project targeting especially the Chinese domestic market. Companies like ReneSola see strong demand from China and other parts of Asia. Some Taiwanese solar companies even expect to raise their price in the second half of 2011 according to a digitimes report.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in LDK over the next 72 hours.

Additional disclosure: may initiate position in renesola and LDK solar in coming weeks