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Avian's upgrade of First Solar (FSLR +3.5%) seems to outweigh Auriga's downgrade, as the...

Avian's upgrade of First Solar (FSLR +3.5%) seems to outweigh Auriga's downgrade, as the volatile shares are among today's top gainers. Avian sees FSLR addressing new markets where subsidy dependency is not the most important, while Auriga sees new strains on its balance sheet suggesting a longer path back to profitability than previously modeled.
Comments (2)
  • The Mark
    , contributor
    Comments (8) | Send Message
     
    FSLR's business model is not economic on a non-subsidized basis and won't be before they run out of cash; plus, trying to raise additional capital at reasonable dilution cost is unlikely; we often find in companies like this, the next step will be to cut back on R&D spending to conserve cash which is another strategic nail in the coffin.

     

    The non-subsidized projects the analyst mentions in his call appears to be disingenuous. Our research indicates that all of the projects for every solar company are subsidized by either: utility/energy company R&D budgets, PR budgets, state and/or federal grants and tax credits -- beyond any direct subsidies. Solar electricity is not economic in the current energy market anywhere in the world that we can calculate.

     

    Additionally, as more and more analysts are realizing, almost all of the viability and BE studies for solar were done when nat gas was 200% higher than it is now. Discussions with utilities are indicating to us for example, that the capitalized cost of converting from coal to gas fired is a fraction of the cost of converting or building solar. Further, the per megawatt cost of nat gas fired generation is falling at a faster rate than the curve of solar costs. As usual, I suggest to readers, don't believe me. Do the research on your own and see if I'm right.
    7 May 2012, 01:31 PM Reply Like
  • AGA7d
    , contributor
    Comments (246) | Send Message
     
    There are RPS and ITC out there, so by 2016, solar projects will still be economic despite the low NG.

     

    The real question here is how long the low NG can last - if the LNG terminals start to run, then NG price will stabilize and may go up soon. This may be a cyclic bottom for NG...

     

    20-30 years away, then I am confident NG price will rise when shale gas supply getting tight. Of course, the long-term bright view on solar does not guarantee the prosperity or survival of current players. But of all the co in the field, FSLR has a pretty good chance to survive and prosper.
    7 May 2012, 01:39 PM Reply Like
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