Amit Kumar

Solar Stocks Come Back to Earth

Market is concerned that YGE paid too much for CyberPower and may face problems with financing the expansion of poly facilities especially as YGE has not disclosed the Capex requirements.
In the longer run, securing the Silicon supply is positive for YGE, but the falling silicon prices, and YGE's reliance on bank facilities to finance the capex poses a big headwind. Solar companies that rely on the their cash flow for any capex and have good cash reserves have a lower down side risk at this point, I would say.

Solar Stocks Come Back to Earth

sorry for the typo, I meant companies with installed capacity and scale, long-term contracts such as FSLR and good conversion efficiencies, such as and SunTech,

CD Te efficiencies for FSLR are much lower than Si based panels, and I mentioned in my article "I believe that silicon based companies will benefit more in the next 12-18 months from the price decline and margins for non-Si based companies, such as FSLR, will get squeezed from resulting lower ASPs"

On Dec 10 09:01 AM jcordes wrote:

> Lower polysilicon prices are counterintuitive for FSLR. Obviously
> this makes the panel makers more price competitive. You state;
> good conversion efficiencies, such as First Solar (FSLR). FSLR's
> conversion efficiency is among the worst in the market place. FSLR's
> only advantage is priceing to polysilicon, which is being eroded
> by the drop in poly prices.
>
> Your article is full of erroneous comments and conclusions.

Bullish on Solar Energy, Bearish on Solar Stocks

Great point. In any growth industry, margins continue to get squeezed until no player can make an "economic" profit (except monopolies), hence 25-40% margins are not sustainable in the long term.
Silicon producers are beginning to bring capacity online now after watching steady surge in demand for over four years in the solar industry. If that does not happen, STP will suffer as well, from their 10-K : "we cannot assure you that we will be able to obtain supplies from them [long-term suppliers] or any other suppliers in sufficient quantities or at acceptable prices"
FSLR, on the other hand, has long term supply (2-3 yrs) contracts for CDTe but CDTe has one of the lowest conversion efficiencies.

Bullish on Solar Energy, Bearish on Solar Stocks

An economist article, Bright Prospects, dated March 8th, 2007 published conversion efficiencies stats for the CDTe, CIGs, Sil etc. putting crystalline silicon on the top with 25+%.

www.economist.com/sear...

STP FSLR financials and efficiencies are quoted from their 10K 2006 and later quarterly statements. The data is obtained from the most recent filings.

Yes, there are a couple of typos.