Spain’s government is considering a proposal which would significantly cut the incentives built into the company’s solar subsidy program, Lehman’s Vishal Shah asserted in a research note this morning.
Shah says the latest proposal being discussed by the Spanish government would call for an annual cap of 300 MW in 2009 with a maximum of 2MW for ground-mounted installations. The proposal would cut incentives to 25 euro cents/kilowatt-hour for ground-mounted and 33 cents for rooftop installations, he writes. The current level is 42 cents.
That proposal, Shah says, would be “clearly below market expectations,” although he notes that it is not an official proposal, and discussions continue.
Shah notes, though, that companies with high exposure to the Spanish solar market could be under pressure if Spain were to reduce subsidies. He cites Canadian Solar (CSIQ), Suntech (STP), SolarFun (SOLF) and Yingle Green Energy (YGE) as companies with significant exposure to the Spanish market.
In today’s trading:
- Canadian Solar is down $2.64, or 6.2%, to $40.25.
- Suntech is down $2.25, or 5.9%, to $36.20.
- Solarfun is down $1.01, or 5.3%, to $18.21.
- Yingli is down $1.38, or 7.8%, to $16.40.