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Posted on 22 November 2011 | 4,093 views

Depression in Solar Sector to Collapse Solar Stocks in 2012

Spending on equipment to make photovoltaic solar products will collapse next year following aggressive capacity expansions in 2010 and 2011 that have created an oversupply of panels in the market, according to a report by research firm Solarbuzz.

Equipment spending for crystalline silicon and thin-film products will slide 47 percent to $7.6 billion in 2012 from $14.2 billion this year, the report said.

Investors in solar stocks have been through a wild ride in recent years and more notably since the start of 2011. With dramatic declines in average selling prices for solar products since the start of this year, many solar companies have reported significant margin contraction. As a result, profits have contracted from record levels seen a year ago. In more dire cases, less competitive companies have shut down manufacturing capacity while some have been forced into bankruptcy.

The industry is also in the middle of a trade dispute over Chinese subsidies to solar companies there. If those protesting are successful, it could mean duty charged on solar equipment which could have a negative effect on companies with operations in China. Earlier this week The Coalition for American Solar Manufacturing (CASM) called on a group of Chinese solar cell and panel importers to explain how what CASM contends is “an unprecedented surge of dumped and subsidized exports made according to weak environmental standards and shipped halfway around the world could possibly benefit US consumers or the environment.”

Solarworld AG, which also has a large manufacturing facility in Hillsboro Oregon, recently reported its first quarterly net loss in two years — its peers Q-Cells SE, Solar-Fabrik AG and Conergy AG have also suffered this year. Solar-Fabrik AG is among those companies most under threat.

Photovoltaic solar panels turn sunlight directly into electricity. The key raw material in most PV panels is crystalline silicon, though some manufacturers use other materials. Those are collectively known as “thin-film.” In 2010 and the first half of 2011, ambitious capacity expansions by minor solar manufacturers helped boost equipment revenue growth rates to 84 percent and 33 percent, respectively, Solarbuzz said.

The combined manufacturing capacity of market-leading companies will be sufficient to meet worldwide demand this year and next, resulting in a major shakeout among solar cell manufacturers from 2012 to 2014. Equipment spending by minor solar players is expected to fall 60 percent in 2012. By 2015, solar market leaders are forecast to account for more than 70 percent of all photovoltaic equipment spending.

Here is a quick glance on how solar stocks have performed over the last 52 weeks — November 2010 thru November 2011.

Solarworld
52 Week Range of 12.20 – 2.65 — currently at 2.77 Euro

Q-Cells
52 Week Range of 4.09 – 0.48 — currently at 0.842 Euro

Solar-Fabrik
52 Week Range 6.59 – 1.85 — currently at 2.269 Euro

GT Advanced Technologies (Stock Symbol: GTAT)
52 Week Range of 17.50 – 6.40 — currently at 7.42

Hanwha Solarone (Stock Symbol: HSOL)
52 Week Range of 9.78 – 1.12 — currently at 1.21

JA Solar (Stock Symbol: JASO)
52 Week Range of 8.57 – 1.40 — currently at 1.52

First Solar (Stock Symbol: FSLR)
52 Week Range of 175.45 – 42.50 — currently at 43.53

Yingli Green Energy (Stock Symbol: YGE)
52 Week Range of 13.59 – 2.75 — currently at 3.29

Trina Solar (Stock Symbol: TSL)
52 Week Range of 31.08 – 5.28 — currently at 6.23

Here is a quick glance of solar stocks which have filed bankruptcy.

Solyndra — American manufacturer in California

Evergreen Solar — American manufacturer in Massachusetts

SpectraWatt — American manufacturer in New York

Here is a quick glance of solar stocks which have halted production of solar panels.

BP Solar — American manufacturer in Maryland

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