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Summary:

For a while there, it looked like 2010 might be the first banner year for solar stocks since 2007. It still could be, although this week is showing that, if solar does make a comeback this year, it’s not going to happen with out some sudden […]

For a while there, it looked like 2010 might be the first banner year for solar stocks since 2007. It still could be, although this week is showing that, if solar does make a comeback this year, it’s not going to happen with out some sudden and stomach-churning setbacks.

The first week or so of a calendar year can be an interesting — if not always accurate — gauge of how investors are feeling about a sector of stocks. Some of the bigger names in solar energy saw a healthy gain in their share prices amid strong volume, signaling a renewed confidence among investors. As of the end of trading Monday, Solarfun was up 36 percent, while Yingli Green Energy and JA Solar were both up 18 percent. Overall, the Claymore/MAC Solar Energy Index was up 11 percent after the first six days of trading, compared with a 1 percent gain in the Nasdaq.

It took only three days to give back most of those gains. The bad news came from Europe, where France said it would cut feed-in tariffs for solar installations and Germany indicated it would do the same in a few months. After trading Thursday, The Claymore/Mac Index was up 2.8 percent, just a bit above the Nasdaq’s 1.1 percent gain.

France had been paying homeowners and businesses 55 euro cents ($0.80) per kilowatt hour for rooftop solar intsallations. On Wednesday, it announced it would cut that tariff to 42 euro cents ($0.61). As Bloomberg explained:

France cut tariffs for electricity produced from rooftop solar panels by 24 percent in an overhaulFollowing a “speculative bubble” that started in November, the Energy Ministry decided it would reject any applications from generators that hadn’t already applied for grid connection, according to the statement. Others will have to re-apply under the new tariff regime.

Then on Thursday, reports emerged that Germany would also cut its solar subsidies. Such a move had been expected for some time, but Germany’s reduction was greater than many had been expecting. According to Tech Trader Daily:

In a research note, Deutsche Bank’s Germany-based analyst, Alexander Karnick, says the report, if true, would be worse than expected for the solar sector “on several levels.” He contends that the consensus was for a roughly 10% cut in the country’s feed-in tariff program in June or July; the story suggests a larger cut, and a quicker implementation. A subsidy cut of that magnitude, he thinks, could trigger a round of price cutting by the solar wafer companies.

In short, the allocation of investor money into solar during the first several days of 2010 left some stocks ripe for a round of profit taking once bad news surfaced. It didn’t take long for that bad news to arrive, and there will surely be more in an industry known for its two-steps-forward, one-step-back method of progress.

But there are other signs that solar energy is moving forward. eSolar, a solar-thermal company, signed an agreement with China’s Penglai Electric to build 2 gigawatts of solar thermal projects in China this decade. The U.S. is offering tax credits to greentech manufacturers that could generate tens of thousands of new jobs. And private investments are picking up even if some government subsidies are disappearing.

Solar bulls may have been dealt a hard blow this week, but then again 2010 has only just started.

Image courtesy of jurvetson’s photostream Flickr Creative Commons.

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  1. oats leaks beans Friday, January 15, 2010

    But system prices are falling very rapidly. So incentives can fall in tandem – while the return on investment should remain about the same. What am I missing? Yes, incentive reductions will occur in a step fashion. But this should be expected.

  2. dennis dickinson Friday, January 15, 2010

    there sould not be any subsidy for PVS.
    solar power is a cash cow. like nellis afb
    it’s just a bad investment like nellis cost $100m to make $1m worth of electricity.
    buy the way, the panles last 20 years that’s a loss of $80m. labor to run the scheem ie. the labor for monitoring & matinance, say 9 people @ $45k ayear?
    a 100watt 12volt panel over it’s life puts out $50 worth of power but cost $500 for that panel
    if it was viable, if at all, it would stand on its own acord.
    pluss that panel also carries the berden of about 314 kilograms of CO2.actualy more then that heat not included.
    thats1400 deg C + 750 deg C to make the silicon for the panels
    not smart or green

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  4. dennis dickinson Friday, January 15, 2010

    NOP “Solar Rally Cut Short by” it’s dumb

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  6. dennis dickinson Friday, January 15, 2010

    solar is not smart or green
    cut cut cut

  7. R. Paul Pokorny Friday, January 15, 2010

    Dennis Dickson please get some facts. PV solar systems, in most USA incentive programs, require a manufacturers warranty to produce 85% of new panel power rating. Grueling application on ocean navigation buoys off Oregon Coast installed in early 1960’s were tested in the early 1990’s during rebuild of the buoy structure. The panels tested 95% of new after 30 years. That is 90 years to get to the warranty specification. Most oil fields producing today will be gone in 90 years. Most fuels that are alternatives to the light and warmth of the sun will be running very low in 90 years.

    Many computer users have ink jet printers. You can get one for $100 US. In 5 years the ink costs are at least triple that. A solar system is like buying an ink jet printer and never having to buy ink.

    Policy makers, investors, and energy users must think about energy decisions that are way out past our fingertips.

  8. dennis dickinson Friday, January 15, 2010

    o.k by your numbers “90 years”
    you’ld break even, NOT smart
    not including -10% for the inverter & -20% for charging of the batterys
    & PVs on trackers, like nellis “cash cows” last about 20 years
    &
    trackers & concentrators void the warranty that is by the way 20 years on most panels.
    &
    i’v been off the grid since 92
    wins at 1/10 the cost is far superior for us.

    1. And I’ve been off the grid since 1989. I’m not sure why that matters….

      There are no batteries involved in grid solar. And most installations do not use active trackers. As solar prices continue to drop it’s cheaper to install more panels than to install trackers. (Trackers only pay if you’re closer to the equator, even at $5 a watt.)

      Solar produces when demand is highest – during the day. The power produced gets sucked right up and used.

      Having solar on the daytime grid means that it won’t be necessary to build extra expensive 24/365 plants that will not be useful during off peak hours.

      If the solar panels exceed needs demand then expensive to fuel natural gas turbines can be turned off and/or hydro facilities can be shut down, saving the water for when the sun isn’t shining.

      And, remember, nighttime winds are often stronger than daytime winds. Solar and wind tend to produce at different times of day. Southern CA solar is going to work nicely with Wyoming wind which tends to start up right before sundown, PST. Move the power back and forth on the existing Intermountain Interie, the HVDC line that stretches from SoCal to Utah and is in process of being extended further north.

      Solar prices are going to continue to fall. Because solar can be distributed to rooftops and over parking lots the cost of transmission is eliminated. Maintenance is low, lifetimes are long.

      The final grid solution will almost certainly include a vast array of generation technologies (wind, solar, concentrated thermal solar, geothermal, tidal, hydro, etc.) along with a variety of storage solutions (pump-up hydro, industrial scale batteries, flywheels, CAES) to create a grid that supplies power when we want it.

  9. dennis dickinson Friday, January 15, 2010

    ops misspelled:
    winds at 1/10 the cost, is far superior for us.

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