sirfisup

Could PV Go the Way of Toasters?

Innovation and improving cost efficiencies along with low labor costs are the driving engines for solor growth worlwide.

It is comical to think that STP is not investing a significant amount of R & D to further improve solar efficiencies and their management team is light years ahead of many other solar PV manufacturers.

Additionaly STP has a very diversified product mix and is more diversified IMHO of any large PV manufactuer.

The capex reduction in 2009 is nothing unusual considering the world recession and oversupply of panels however the 4th Q writedowns were more closely related to STP's polysilicon contracts which were higher than spot market prices.

STP has since renegotiated contracts with their main suppliers and will benefit considerably as the weaker hands in the Chinese PV business are either driven out of business or taken over by the larger players. IMHO it is more likely that the bigger Chinese solar players will not come to the aid of the smaller companies and will be the direct beneficieries as more and more companies will want to do business with established companies who can ensure thet prices and warranties will be enforced.

Its just a matter of when the solar industry will trend up again and most anaylysts see 2011 as the breakout year and we all could see some significant increases in world demand and should be near or close to grid parrity.

The analogy of toasters is bit far fetched and with silicon prices continuing to fall it is more likely that a company like STP with huge labor cost advantages will actually be selling their panels which are more cost effient and power efficient at lower costs than FSLR who for the moment are the market leaders in avg cost per watt but for how long they remain the leader is the bigger question. I wouldn't underestimate the power of the Chinese economy and unlike the US the Chinese need for renewables will far outpace the US demand and will surely benefit the Chinese solar manufacturers and a company like STP will have the most to gain when prices reach grid parrity.