Aug. 19, 2014, 10:20 AM
- "Based on our checks, we estimate the probability of [trade settlement] success is now ~30-40% vs. prior expectations of 5-10%," writes Roth. "The narrative for Chinese solar stocks, in our view, has shifted to a more positive tone."
- Roth's remarks follow a letter from a law firm representing the Chinese government to the U.S. Commerce Department proposing talks for a solar tariff suspension agreement. Last week, Beijing retaliated against U.S. solar module tariffs by closing a loophole for U.S. and Korean polysilicon imports.
- Though admitting many Chinese suspension offers have been rejected over the years, Roth thinks "the Chinese government would not have made an offer without believing it would have a decent probability of success as it does not want to be rejected by the US government publicly."
- Notable gainers: YGE +3.9%. TSL +3.9%. JASO +3.3%. SOL +3.9% CSUN +6%. HSOL +4.3%.
- Solar ETFs: TAN, KWT
Aug. 5, 2014, 11:57 AM
- Bloomberg reports China's National Energy Administration (NEA) might soon announce policies calling on local planners to support more distributed solar projects - specifically, projects in industrial zones, and for companies with buildings sporting large rooftops.
- Among others things, local governments will be encouraged to offer more distributed solar subsidies, and to promote installations on public infrastructure. Financial firms will be urged to offer discounted loans, and to create solar investment funds.
- China is aiming for 8GW of 2014 distributed solar installations (to go with 6GW of utility-scale installations), but there have been doubts the target will be hit following a slow start to the year. Deutsche argued in May 2GW could be a more realistic distributed target.
- Chinese solar names are up strongly. U.S. giant First Solar reports after the bell. TSL +8.4%. CSUN +7.6%. JKS +8.3%. SOL +6.7%. CSIQ +6.3%. JASO +5.7%. HSOL +4.8%. YGE +4.8%. DQ +4.1%. YGE +4.8%.
- Solar ETFs: TAN, KWT
Aug. 1, 2014, 12:26 PM
- Solar stocks are underperforming (TAN -4%) amid a market selloff after SunPower (SPWR -8.5%) posted mixed Q2 results and provided Q3/2014 guidance ranges with midpoints below consensus.
- SunPower also announced it's building a new plant (Fab 5) that could go live in 2017 and eventually produce 700MW+/year of modules, boosting its capacity by over 50%. "Our share has been in single digits for a while and demand for the last 24 months suggests that we can expand share," says CEO Tom Werner.
- The announcement comes 6 weeks after SolarCity (SCTY -3.5%) unveiled plans to build a 1GW+ module plant with newly-acquired Silevo's help, and said it will later build "one or more significantly larger plants at an order of magnitude greater annual production capacity."
- Minimal capacity investments, together with rising U.S./Asian demand, have helped module prices stabilize following gut-wrenching declines in prior years.
- Also: SunPower stated on its CC (transcript) it hasn't decided whether to create a solar project YieldCo similar to SunEdison's (SUNE -4.3%) TerraForm Power (TERP -4.7%), which recently turned in a strong IPO. "It does not look like the company is likely to make a decision anytime soon," says Raymond James.
- Nonetheless, Brean has upgraded SunPower to Buy, citing optimism about strong demand and healthy pricing.
- Other notable decliners: FSLR -3.6%. TSL -8.4%. JKS -6%. CSIQ -5.6%. CSUN -5.7%. YGE -5%. SOL -4.5%. ENPH -5.8%. RGSE -4.5%. HSOL -3.9%. JASO -4.4%.
Jul. 28, 2014, 7:59 AM
- Solar names are under pressure following the U.S. government's move to place anti-dumping duties as high as 165% percent on solar panels and cells from China.
- China condemns the action, saying "if escalating problems in the China-U.S. solar industry are ignored, in the end it will damage up and downstream industries in both countries."
- Moving sharply lower premarket: YGE -5.1%, CSIQ -4.3%, JKS -3.8%, TSL -2.7%, JASO -2.5%, SCTY -2.2%, HSOL -4.9%
- Moving up: SPWR +1.8%, FSLR +2.7%.
- ETFs: TAN, KWT
Jul. 14, 2014, 1:38 PM
- WTO judges have ruled the U.S. imposition of tariffs on Chinese solar modules, steel products, and other exports violates global trade rules.
- Though rejecting some Chinese arguments against U.S. tariffs, the judges ultimately ruled the tariffs are inconsistent with obligations under the 1994 Marrakesh accord.
- The U.S. originally imposed tariffs on Chinese solar module exports in 2012, and followed up last month by slapping new preliminary tariffs meant to close a loophole related to the use of non-Chinese cells.
- Chinese solar stocks are rallying on an up day for equities: YGE +4.8%. SOL +3.1%. CSUN +5.5%. TSL +2.6%. JKS +2.8%.
- SolarCity (SCTY +2.4%), which relies heavily on Chinese module imports (that might change in a few years), is also higher.
- Solar ETFs: KWT, TAN.
Jul. 8, 2014, 10:08 AM
- OTR Global reports the Chinese government is thinking of cutting its 2014 solar installation targets due to credit availability issues.
- The government previously set a 2014 installation target of 14GW (8GW distributed systems, 6GW utility). Deutsche has already expressed doubts about its feasibility following a soft Q1.
- U.S. and Japanese shipments have been faring better, but new DoC tariffs could take a toll on near-term Chinese sales to the former market.
- Solar stocks are lower amid a market selloff: YGE -5.3%. CSIQ -4.7%. SCTY -3.5%. FSLR -3.5%. SPWR -3.2%. JKS -4.6%. HSOL -4.4%. SOL -3.5%. DQ -3.4%. CSUN -5%. TSL -2.7%. ENPH -3%.
- Solar ETFs: KWT, TAN
- Update: OTR's note comes amid a report the Chinese government plans to hike its subsidies for power sales stemming from rooftop solar projects by up to 55%, putting their revenue (on a per-kWh basis) on par with ground-mounted projects.
Jul. 7, 2014, 11:31 AM
- Most index ETFs trail their benchmarks over time by about the amount of their expenses, but the Guggenheim Solar ETF (TAN) has beaten the MAC Global Solar Energy Index by a median 360 basis points each year over the past few.
- How? Like a number of other funds, TAN lends some of its holdings to investors - often shorts - in exchange for a fee which can get quite large when shorting demand is high. Since the fund's 2008 inception, "TAN had a portfolio of stocks the Street desperately wanted to short," says ETF.com's Dave Nadig.
- Other solar ETFs: KWT
Jul. 2, 2014, 9:49 AM
- Canaccord has launched coverage on SolarCity (SCTY +4.4%), SunEdison (SUNE +1.2%), Canadian Solar (CSIQ +2.3%), and RGS Energy (RGSE +4.7%) with Buy ratings.
- SunPower (SPWR +0.6%) is up slightly in spite of being started at Hold.
- Canaccord's Josh Baribeau predicts the solar industry as a whole will benefit as "financial innovation such as risk pooling, securitization, de-levering etc. continue to drive the costs of capital and system costs downward."
- Baribeau expects SolarCity ($94 PT, leading the securitization trend) to beat Street deployment estimates, and to see strong cash flow growth with the help of declining component and financing costs.
- He likes Canadian's low manufacturing costs, industry-leading commercial backlog, and relatively low Chinese sales dependence. His target is $43, or 10x 2015E EPS.
- Solar ETFs: KWT, TAN
- Previous: Deutsche upbeat on solar YieldCo potential
Jun. 17, 2014, 12:55 PM
- SolarCity has announced plans to build a 1GW+ module plant in NY, and to follow it up with one or more much larger facilities. Notably, the company declares (in spite of a current capacity glut) it needs to build the plants to meet long-term solar demand.
- Yingli missed Q1 estimates, but reported a healthy gross margin (thanks in part to strong Japanese sales) and reiterated full-year guidance.
- Also: Goldman is out with a bullish note, predicting rooftop solar installations will post a 40% CAGR through 2016.
- Gainers: FSLR +2.8%. SPWR +4.2%. SUNE +4.4%. JASO +8.2%. SOL +7.5%. JKS +6.5%. CSIQ +7.4%. DQ +4.2%. ASTI +3.9%. HSOL +6.9%. TSL +5.6%. ENPH +3.5%. CSUN +3.7%. RGSE +11.3% (announced a new Hawaiian deal).
- SolarCity's plans are a positive for equipment vendors GT Advanced (GTAT +1.5%) and Veeco (VECO +1.6%), each of which has seen its solar orders plummet thanks to the capacity glut.
- Solar ETFs: KWT, TAN
- Yesterday: Solar stocks rally; Deutsche upbeat on YieldCo potential
Jun. 16, 2014, 11:05 AM
- "We are becoming increasingly constructive on the solar sector as we expect further tightening of the solar supply/demand balance and expect increased investor interest driving valuation multiple expansion," says Deutsche, which last month struck a far more cautious tone on the industry.
- The firm adds it expects "the emergence of 5-6 publicly traded [solar project] YieldCos over the next 12-18 months to act as a robust growth enabler." It has upgraded SunEdison (SUNE +6.4%), which recently filed an S-1 for its TerraForm Power (TERP) YieldCo, to Buy.
- YieldCo momentum is seen growing ahead of potential 2016 U.S. solar tax credit changes, and greater international activity is expected to start in 2015, as grid parity is reached in more markets.
- Notable gainers: FSLR +3%. SPWR +4.7%. CSUN +5.2%. SOL +4.8%. RGSE +3.4%. HSOL +3.4%. YGE +3.3%. CSIQ +3.1%.
- SunPower might also be getting a lift from news of a $200M, 2-year loan program with Admirals Bank to finance U.S. residential solar projects. SunPower has already reached residential financing deals with Google and BofA/Merrill this year.
- Solar ETFs: KWT, TAN
Jun. 4, 2014, 9:30 AM
- The Department of Commerce has imposed new preliminary tariffs on Chinese solar module imports, covering both modules featuring Chinese and non-Chinese cells. Trina (NYSE:TSL) is seeing an 18.56% tariff, bankrupt Suntech (NYSE:STP) a 35.21% tariff, and most other firms a 26.89% tariff.
- The move follows a complaint from Germany's SolarWorld that Chinese firms are using a loophole involving imported cells to sidestep the DOCs 2012 tariffs. A separate anti-dumping decision is due on July 25.
- Morgan Stanley notes many were expecting either a lower tariff (perhaps around 15%) or a settlement similar to the EU/China deal. Not surprisingly, the Chinese government says it's "strongly dissatisfied" with the DOC's action, and warns it could hurt trade ties.
- Chinese solar exporters are off: TSL -6.2%. YGE -5.8%. CSIQ -5.1%. JKS -8.8%. JASO -4.4%. CSUN -3.3%.
- U.S. peers First Solar (FSLR +2.5%) and SunPower (SPWR +5.5%) are higher. But SolarCity (SCTY -2.8%) and SunEdison (SUNE -3.5%) are off, as investors fear higher panel costs for solar projects. Also: SunEdison has announced a new $500M convertible debt offering. $350M-$400M of the proceeds will go to its TerraForm Power (Pending:TERP) spinoff.
- Solar ETFs: KWT, TAN
Jun. 3, 2014, 7:02 PM
- Pres. Obama’s plan to cut power plants’ carbon dioxide emissions places a widely differing burden on different states; EPA figures show targets for 2030 range from a 72% reduction in measured emissions rates to just 11%.
- As well as having the highest emissions rate goal, North Dakota is being asked to make the smallest cut from 2012 levels (11%); Washington state has the lowest goal and is being asked to make the steepest reduction (72%).
- Though Washington's governor supports the climate plan, heavy polluters, such as Louisiana and Texas, promise to fight the rules; the top U.S. emitter of greenhouse gases, Texas must cut ~100M metric tons of carbon dioxide from its annual emissions, more than the next three states combined.
- The EPA says it is trying to be flexible, but such an approach could leave it vulnerable to legal challenges.
- ETFs: XLE, XLU, TAN, ERX, KOL, IDU, VDE, OIH, ERY, FCG, VPU, DIG, KWT, GASL, DUG, IYE, GASX, PXJ, UPW, FENY, RYE, RYU, FUTY, FXN, FXU, DDG, SDP
Jun. 3, 2014, 12:45 PM
- EPA chief Gina McCarthy says she expects for significant changes in proposed state emission goals before a final rule is issued next year if the individual states show they can’t meet the targets.
- McCarthy says the agency made changes when developing its rules on mercury pollution in 2012 after utilities complained, and says she "wouldn’t be surprised if we made significant” revisions to the carbon proposal.
- McCarthy notes "confusion" around the targeted 30% emission cuts, saying it’s not a goal of the plan but an estimate of what the EPA thinks can be achieved.
- Coal names are broadly lower: WLT -4.4%, ACI -3.7%, ANR -2%, ARLP -1.9%, CNX -1.3%, CLD -0.3%, BTU -0.2%.
- Big utilities are mostly higher: EXC +1.6%, AEP +1%, NRG +0.7%, D +0.5%, XEL +0.4%, SO +0.3%, PEG +0.2%, NEE +0.1%, DUK -0.2%
- ETFs: XLE, XLU, TAN, ERX, KOL, IDU, VDE, OIH, ERY, FCG, VPU, DIG, KWT, GASL, DUG, IYE, GASX, PXJ, RYE, FENY, UPW, RYU, FUTY, FXN, FXU, DDG, SDP
Jun. 2, 2014, 7:27 PM
- Representatives of the coal and utility industries criticized proposed new U.S. emissions rules for power plants, but WSJ reports that some were relieved the outcome wasn't worse.
- The industries had been hoping the EPA would apply emission reduction standards from a baseline of 2005, and they feared the EPA draft would use a more recent, and thus tougher-to-meet baseline, but the Obama administration decided on 2005 after all.
- Coal-fired power plants won't have much difficulty meeting the EPA's mandate for a 30% reduction in carbon emissions by 2030, an industry lobbyist says, since carbon emissions from coal plants have dropped 14% since 2005 (also).
- However, coal companies and electric plants remain concerned about an earlier deadline to reduce emissions 25% by 2020; other big consumers of power, such as steel mills, say they too could have a tough time with the new rules.
- ETFs: XLE, XLU, TAN, ERX, KOL, IDU, VDE, OIH, ERY, FCG, VPU, DIG, KWT, GASL, DUG, SLX, IYE, GASX, PXJ, FENY, RYE, UPW, FUTY, RYU, FXN, FXU, DDG, SDP
May. 29, 2014, 2:45 PM
- SunEdison has filed an S-1 for its anticipated solar project spinoff. The spinoff, named TerraForm Power, will own a slew of SunEdison-built solar projects, while generating revenue (and distributing related cash flows) from electricity sale agreements.
- The IPO might pave the way for other companies with sizable downstream project portfolios, such as First Solar (FSLR +2.8%), JinkoSolar (JKS +9.7%), and Trina (TSL +8.2%), to do spinoffs of their own. SunEdison's move comes after SolarCity (SCTY +5.6%) twice raised funds by selling solar asset-backed notes.
- Solar stocks are following SunEdison higher (TAN +2.6%). In addition to the aforementioned companies, gainers include SunPower (SPWR +2.5%), Yingli (YGE +3.5%), Canadian Solar (CSIQ +4.6%), and Daqo (DQ +1.5%).
May. 21, 2014, 11:36 AM
- Though Trina's Q1 module shipments were only in-line with the company's revised guidance, it's expecting Q2 shipments will rise 70%-81% Q/Q.
- Volatile solar stocks are responding well (TAN +3.8%) to Trina's outlook, which follows a more subdued Q2 growth forecast from Canadian Solar (CSIQ +3.6%) last Friday, and comes amid general concerns about Chinese growth.
- Notable gainers (besides Trina): CSUN +14.1%. SOL +8.7%. JKS +6.6%. YGE +5.9%. DQ +5.7%. JASO +4.9%. ASTI +6.8%. ENPH +3.9%. SUNE +2.7%.
- NPD Solarbuzz recently noted the world's top-20 module suppliers are collectively forecasting 30%+ 2014 shipment growth. The firm added the outlooks imply 2014 end-market demand will be near 50GW.
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