Bloomberg the Company

Bloomberg Anywhere Login


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Follow Us

Industry Products

Solar Industry Seen as Winning Bet for $1.3 Billion Skagen Fund

Don't Miss Out —
Follow us on:

Feb. 13 (Bloomberg) -- Solar industry companies are set for a “boom” as falling costs make harnessing the sun’s energy a more competitive alternative, according to Norwegian fund manager Skagen AS.

“We now have a situation where solar is competitive with traditional energy in the grid or off the grid,” Geir Tjetland, who helps manage the 960 million-euro ($1.3 billion) Skagen Vekst fund, said in an interview in Stavanger yesterday. “About 0.4 to 0.5 percent of all energy consumed is solar. This will grow a lot in the next five to 10 years.”

The industry is recovering from a two-year battering that was triggered by a slump in prices and industry overcapacity just as European governments reduced subsidies because of slowing economic growth. That led to sharp declines in the industry’s biggest companies, including GCL-Poly Energy Holdings Ltd., and REC Silicon ASA.

GCL-Poly has climbed 32 percent over the past year, REC Silicon has surged 278 percent. The benchmark BI Global Large Solar Energy Index of 15 manufacturers, which slumped 87 percent from a February 2011 peak through November 2012, has rallied more than fourfold from its trough.

Solar demand is expected to rebound, helped by growing appetite from Japan and China, and as technological advancement brings down the cost of production, Tjetland said.

“The price of solar is down to about $1 per watt without subsidy,” he said. At that price, more than 4 billion people in regions including southern Europe, Africa and Asia will be able to buy solar energy cheaper than traditional energy, he said.

“That’s why we think that the boom will come,” he said.

Unpopular Companies

The market for polysilicon is expected to grow 45 percent by the end of 2015, according to Skagen. That will increase demand for shares in the lowest cost producers, which include REC Silicon, South Korea’s OCI Co. Ltd. and China’s GCL, according to Skagen Vekst portfolio manager Ole Soeberg.

The price of polysilicon has climbed to almost $20 per kilogram (2.2 pounds) at the start of this month from less than $16 at the end of last year, according to data compiled by Bloomberg. “Currently, the most effective companies can produce one kilogram of polysilicon for around $15,” Soeberg said.

Together, REC, OCI and GCL have an annual capacity of about 150,000 metric tons, he said. That’s about half of total global capacity, according to data compiled by Bloomberg.

“The investment case is based on a general misconception of the solar cell industry as a whole; in other words, all companies, not just one,” Soeberg wrote. “Although the companies are unpopular, we are once again seeing pockets of value.”

To contact the reporter on this story: Ilana Friedman-Schroit in Stavanger at

To contact the editor responsible for this story: Jonas Bergman at