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A Look at Four Polysilicon-Based PV Manufacturers' Funding

Envoy global,

One thing you seem to miss is the "scale". A good example will be Dell Computer, it has no proprietary technology, low threshold to entry, but it has the scale to become a $45B business today. That is exactly the 4 companies you mentioned are trying to achieve- scale. They could over extend themselves financially, if the demand does not keep up with the supply. But they bet on it with their money. All the major players are doing the same thing, including Q-cells and First Solar- your favorate solar company. Their huge investment in CAP-Ex may turn out to be a bad investment... we will see.

A Look at Four Polysilicon-Based PV Manufacturers' Funding

Envoy global,

You said < In fact I am very bullish on solar and I 100% agree that the solar industry presents some great investment opportunities, but I don't think the companies mentioned here are one of those opportunities. >

Name a few companies you think will do well, and explain why they are better than the 4 companies you are so bearish about.

Will Some Solar Companies Face a Cash Crunch?

These companies you mentioned could just hold back their capacity expansion, and just sell what they can produce to keep the product price steady, or even to go up if demand increases. Then all the potential cash flow problem as you mentioned will go away. Instead, they are doing the opposite, because they believe by increaing the output, the price will go down towards grid parity, which will in turn drive the demand up tremendously. I think they are doing the smart thing, do you think so?

Will Some Solar Companies Face a Cash Crunch?

To Envoy Global,

As you said " Are the companies just shipping tons of product without actually receiving the cash? When are they getting paid? How will they continue to finance the cash drain that occurs because of prepayment to suppliers and longer credit cycles to customers?"

Do you have any evidence that they are not getting paid from their sales? They would go under if the market demand starts to shrink and overspply occurs. But I don't see that is happening yet. You said the market is oversupplied right now, how is that so?