Now's your time to get into solar.
As 200-point swings in either direction have become commonplace for the Dow over the past month, solar stocks have shed anywhere from 10% to 30% of their value.
But one look at recent activity and the outlook for the sector will show you they won't remain discounted for long...
Why it's time to shine
I recapped solar earnings in these pages a few weeks ago, when major players like Renesola (NYSE: SOL), LDK Solar (NYSE: LDK), JA Solar (NASDAQ: JASO) and others were reporting doubling, tripling, and even quadrupling of revenue and profits for the quarter.
Now that earnings season has all but passed, we're starting to see the announcement of deals that will drive solar growth in the quarters to come.
Just look at some of the announcements from the past two days:
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JA Solar Secures 10 GW Supply of Poly Wafers from GCL-Poly
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Sunpower (NASDAQ: SPWRA) Building New Solar Plants in Cali and Italy
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GT Solar (NASDAQ: SOLR) Announces First Orders for LED Production Equipment
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Solar Inverter Shipments Hit Record High in Q3
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Sharp to Invest $180 Million in New Solar Production Line
And with the recent bullish earnings and deal activity, analysts are taking notice...
Auriga initiated coverage on Renesola with a buy rating and a $20 price target, citing the Chinese company as a “low-cost polysilicon solar leader.” The stock currently trades for $9.00.
The investment firm also put a Buy rating on Suntech (NYSE: STP) with an $11.00 price target and on Trina Solar (NYSE: TSL) with a $38.00 price target — both significant premiums to current levels.
Jefferies & Co. has also chimed in, reiterating a Buy rating on Trina Solar with a $40.00 price target. Folks, Trina's currently trading for less than $25.00.
Wells Fargo upgraded Yingli Green Energy (NYSE: YGE)... ThinkEquity upgraded LDK Solar (NYSE: LDK) and First Solar (NASDAQ: FSLR)...
This all happened this week.
It always comes back to China
China already manufactures the most solar products and has the largest wind energy market in the world. And now the country is taking additional measures to secure its dominance of the future world economy.
Bloomberg reports this week, “China will subsidize half of the bidding contract prices for key solar equipment and create 13 industry zones as models for solar energy applications.”
China's Ministry of Finance also said it wants to install 1,000 MW of solar capacity per year after 2012; it has a 20,000 MW solar target for 2020.
The Financial Times said this week a report from Ernst & Young concludes, “China has surged ahead of the rest of the world in renewable energy, creating a 'new world order' in the low-carbon sector.”
It also notes: “China has opened up a healthy gap,” while “the U.S. is falling behind.”
The U.S. is piling up a chronic history of pioneering breakthrough technologies, only to let them be dominated by other countries...
We gave the auto market to the Japanese. NationMaster ranks the U.S. 16th in broadband access per capita — Taiwan and Korea are both beating us. China's already way ahead of us when it comes to traditional solar manufacturing.
But one place we may be able to beat them is in the fast-growing world of building integrated photovoltaics (BIPV): things like solar windows and roofs.
It's a market expected to increase tenfold to $8 billion annually by 2015.
Billions are at stake in the market, and the Chinese know it.
Just yesterday, China Sunergy (NASDAQ: CSUN) partnered with Israel-based Pythagoras to develop its own version of a solar window.
Call it like you see it,
Nick
Editor, Energy and Capital
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