Solar Makers Spike on Stabilizing Prices

Joel Anderson |

JASO, HSOL, STP, TSL, FSLR, CSIQ, SPWR, DB, Vishal Shah, solar, solar panels, PV panels, photovoltaic, China, UK, United Kingdom, analystSolar panel manufacturers were no doubt thrilled to see 2011 end, a year that saw industry share values plummet amid falling prices. However, after months of low panel prices, oversupply, and decreasing margins, news today seemed to show prices for solar panels stabilizing and bolstered share prices across the industry.

Analyst Has Positive Outlook

Vishal Shah, an analyst at Deutsche Bank (DB), highlighted several factors that should contribute to stabilizing prices and aiding solar panel makers in regaining some of last year's lost ground. Shah mentioned unusually strong sales in Germany in the fourth quarter as well as high demand in Italy and the United States. With inventories at all-time lows and further gains in China and India, Photovoltaic or PV cell makers should be the benficiaries of boosted orders.

"Our checks indicate that inventory levels across the supply chain are now at record low levels and we believe record December month shipments (in Germany) is likely to create a sense of rush among installers" in the first half of 2012, wrote Shah.

Positive Outlook Boosts Shares Across Industry

Solar stocks tend to rise and fall as a group, so the positive outlook from Shah and the prospect of stabilized prices put a number of solar companies into motion. Among the biggest gainers were Chinese companies, with JA Solar Holdings (JASO) and Trina Solar (TSL) showing gains approaching 30 percent, Suntech Power Holdings (STP) gaining over 25 percent, and smaller company Hanwa Solarone (HSOL) leapt over 35 percent on nearly three times its normal volume.

American solar makers got in the act as well. Industry leader First Solar (FSLR) gained nearly 10 percent while SunPower Corporation (SPWR) was up just over 10 percent. Also joining the rally was Canadian manufacturer Canadian Solar (CSIQ) which moved over 13 percent in the positive.

UK Capacity Also Spikes

Wednesday also brought news that capacity in the United Kingdom increased by a factor of ten in 2011 as installers took advantage of the rock bottom prices on PV panels and a government incentive for home roof-top arrays that's likely to be on the near-term chopping block. Great Britain installed solar panels with a capacity of some 761.8 megawatts in 2011, up from 2010's 76 megawatts installed. However, with the government expected to kill the subsidy helping pay for the installations, the future is murkier for solar in the United Kingdom. “It’s been a very busy and successful year for the solar industry,” Howard Johns, chairman of the Solar Trade Association, said. “But now most of the industry is at a standstill with the uncertainty caused by the government.”

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
CABO Cable One Inc. 577.18 -1.55 -0.27 280
CSIQ Canadian Solar Inc. 12.59 -0.37 -2.85 122,445
DB Deutsche Bank AG 11.98 -0.77 -6.04 3,062,499
FSLR First Solar Inc. 36.61 -0.45 -1.21 187,813
HSOL HSOL n/a n/a n/a 0
JASO JA Solar Holdings Co. Ltd. 5.92 -0.10 -1.65 48,600
SPWR SunPower Corporation 8.42 -0.10 -1.17 104,030
TSL Trina Solar Limited Sponsored ADR (Cayman Islands) 10.20 -0.12 -1.16 142,261

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