StockCall Scrutinizes First Solar and Suntech Power: Solar Sector Seeing a
LONDON, February 11, 2013
LONDON, February 11, 2013 /PRNewswire/ --
2012 was a difficult year for the solar sector as excess capacity and weakness
in core European markets had a negative impact on pricing. However, the
outlook for the solar sector has improved significantly, which is a good sign
for solar companies such as First Solar Inc. (NASDAQ: FSLR) and Suntech Power
Holdings Co. Ltd. (ADR) (NYSE: STP). StockCall reviewed the solar industry and
chose First Solar and Suntech Power for its technical coverage. These free
reports can be seen for free at
A Difficult Year
Solar companies had a difficult two years as weakness in the world's top solar
market, Europe, and excess capacity sent prices down sharply for solar
modules. The crisis in the solar industry led to many companies filing for
bankruptcy, including Solyndra in the U.S.
According to research firm IHS, by the end of 2012 there were less than 150
global solar module and cell companies, down from 750 in 2010. The significant
drop in solar firms was due to consolidation.
In Europe, the debt crisis led to diminished government support which hurt the
solar industry. At the same time, the industry was hit with oversupply. These
factors contributed to a sharp decline in prices of solar modules. However,
solar companies could not bring down their costs even as prices fell,
resulting in significant losses for solar companies.
Solar Industry Showing Signs of Recovery
While solar industry has had a difficult two-year period, the worst of the
crisis seems to be over. In fact, the solar industry is showing signs of a
Earlier this year, Warren Buffett's Berkshire Hathaway bought two SunPower
solar projects in California for $2.5 billion. The Buffett-deal is a sign of
confidence in the solar industry. Not surprisingly, solar stocks rallied after
the deal was announced last month.
The last-minute fiscal cliff deal also boosted the solar sector as it ended a
great deal of economic uncertainty.
Another major factor contributing to the rebound in the solar industry is
China's plan to boost its solar energy supply. An official with China's
National Energy Administration recently said that the country will raise its
solar energy supply target from 21 gigawatts (gw) to 35 gw by 2015. The
Chinese government is also providing support to China's struggling solar
SunTech Expects Soft Demand Environment to Continue in Early 2013
Back in December, at the time of its release of third quarter results, SunTech
CEO David King said that with the soft demand environment expected to persist
into early 2013, the company has taken decisive steps to right-size production
capacity and streamline operations, which will reduce production cost and
operating expenses. Download the free research on SunTech by signing up now at
SunTech believes that the initiatives it took will strengthen its business and
allow it to improve profitability as the market recovers.
The company will report its fourth quarter results in March, 2013.
First Solar Acquires 50 MW Solar Project
Last month, First Solar announced that it acquired the 50 MW Macho Springs
project developed by Element Power Solar in Luna County, New Mexico. On
completion, the project will be the state's largest solar power project, the
company stated in a statement last month. Register for today's free analysis
on First Solar at
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