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Solar stocks lower again; investors worried about Chinese draft proposal

  • The Chinese government, which has a 12GW 2014 solar installation target, wants to see 8GW of installations involve distributed solar systems (such as those installed on residential and commercial buildings), and just 4GW of higher-margin utility-scale deployments.
  • Credit Suisse notes investors are concerned the 12GW target won't be attainable if utility-scale installations are capped at 4GW. It thinks Yingli (YGE -5.9%), Trina (TSL -7%), and JinkoSolar (JKS -5.3%) have the most to lose if such a cap is implemented.
  • Nomura is less concerned, noting most companies it has talked to believe 4GW "will be more of a guideline rather than a firm cap." The firm adds China's solar policy discussion is "fluid," and that the government remains committed to supporting solar adoption.
  • Notable solar decliners (in addition to the aforementioned companies): HSOL -12.1%. SPWR -5.6%. CSUN -5.5%. JASO -3.4%. DQ -2%.
  • Last Friday: Solar stocks fall in spite of market rally
Comments (11)
  • moreofthesame
    , contributor
    Comments (743) | Send Message
     
    The credit suisse report states that YGE is targeting 500MW for 2014, TSL about 600MW and JKS about 300MW. 4 GW seems enough to take care of those projects. How big of a share do those 3 companies get of the 4GW's?
    Is this supposedly "fluid" discussion truly reason enough for the sell off that we are seeing now??
    9 Dec 2013, 03:00 PM Reply Like
  • chicagomary
    , contributor
    Comments (83) | Send Message
     
    IMO, solars are just selling off as they have had a big run in "13 and money usually goes somewhere else the next year...Example $ABX from Barron's '14 LIST (UP ~3% JUST TODAY)
    9 Dec 2013, 03:23 PM Reply Like
  • moreofthesame
    , contributor
    Comments (743) | Send Message
     
    I still think that this must be a buying opportunity of some sort. I just don't see the extreme down side here. Solar has been growing every year, it had a big downfall after subsidies went away and poly prices fell but ASP's are stabilizing and EPS's are improving, demand is growing.... so whats the problem? China can't make up its mind to exactly how they will allocate their interest in solar at this point and the market crashes? I don't think that this will have too much impact on 2014 solar business worldwide.
    9 Dec 2013, 04:21 PM Reply Like
  • 123stockman
    , contributor
    Comments (4) | Send Message
     
    I don't see the correlation between China's deployment of solar installations and the domestic installers, like SPWR or RSOL. In my opinion It is just an available way to explain why investors took profits in the solar stocks. Looks like this may be a buying opportunity for the longs in solar.
    9 Dec 2013, 05:03 PM Reply Like
  • moreofthesame
    , contributor
    Comments (743) | Send Message
     
    I agree, I see most of the news as an attempt to explain things rather than to document any facts. Lets see how low this is going to go but it is getting pretty insane at this point. So far there is no substantial reasons why earnings would not be as expected in 2014.
    9 Dec 2013, 05:58 PM Reply Like
  • jontynought
    , contributor
    Comments (12) | Send Message
     
    Most of the world will continue to expand solar in2014
    9 Dec 2013, 06:51 PM Reply Like
  • Andy Zelenak
    , contributor
    Comments (296) | Send Message
     
    Speculators are bailing. ReneSola down 40% in three days... Pleas sir, may I have some more?
    9 Dec 2013, 07:34 PM Reply Like
  • hneumann
    , contributor
    Comments (584) | Send Message
     
    chicagomary

     

    "IMO, solars are just selling off as they have had a big run in "13 and money usually goes somewhere else the next year"

     

    Agree with first part of your comment. But they needed a catalyst for selling off. Solar is booming in all continents, by far not depending on Chinese solar growth alone. A good next ER result of one of the major solar companies, and all solar stocks will soar again.
    9 Dec 2013, 08:49 PM Reply Like
  • guo0pen
    , contributor
    Comments (3) | Send Message
     
    One way to explain today's solar sell off : More people believe the story by Credit Suisse than those believing Nomura. A further question is "why more people believe in Credit Suisse?" A possible anwer is: Credit Suisse have more followers. Even further question "Why Credit Suisse have more followers then?" One possible guess is that they are bigger bank and hence have more business.
    9 Dec 2013, 10:06 PM Reply Like
  • max132se
    , contributor
    Comments (5) | Send Message
     
    by bloombergChina Encourages Power Grid Purchase of Solar to Boost Capacity
    China’s government asked power grid companies to buy all the solar energy produced in their coverage areas, providing a possible boost to solar panel makers.

     

    The requirement includes power from distributed solar projects, according to a notice issued by the National Energy Administration on its website yesterday. Power grids that don’t comply will be have to pay compensation, it said.

     

    China, the biggest solar-panel producer, is likely to miss its target to connect 5 gigawatts of solar capacity to the grid this year because of bottlenecks, according to London-based researcher North Square Blue Oak. The latest policy may boost the nation’s total on-grid solar capacity to 12 gigawatts next year, benefiting solar panel makers such as Yingli Green Energy Holding Co. and Trina Solar ltd.

     

    “The policy listed some detailed rules to encourage grid companies to buy more solar electricity, which will help increase next year’s new capacity, ” Tian Miao, an energy policy analyst with NSBO, said by phone today, “This could also be bullish for leading photovoltaic manufacturers as they can seek to reduce their significant profit loss on a better downstream outlook. It will ease the market’s oversupply to some extent next year.”

     

    The nation may only produce 3 gigawatts of new grid-connected solar capacity this year, missing a target of 5 gigawatts set at the beginning of the year, said Tian.

     

    China is estimated to have total on-grid solar capacity of 10 gigawatts by the end of this year, more than double from 2012, according to an NEA statement posted Dec. 4 on its website.
    9 gig project concern by Gordon Johnson is solved.
    10 Dec 2013, 04:27 AM Reply Like
  • max132se
    , contributor
    Comments (5) | Send Message
     
    SOL total modules sale in china is around 1% of the total modules sold in china. are we really gonna listen to a company that is doing 1% sale in china as a gauge for 2014 demand. And for Gordon johnson, how the hell he always get 9giga. the figure should be 4.5 low and high 8-9. just like trina said when they give estimate 100-200/q for next year
    10 Dec 2013, 04:36 AM Reply Like
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