276 replies to this topic

[eysteinh]

Whoever felt bad about germany for investing lots of subsidies in making solar there, its EEG levy is currently very very profitable:

 

http://www.photon.in...photon?id=85924

 

"This means that last month, revenue generated by the EEG levy and from selling EEG electricity on the energy stock market was more than sufficient to cover the costs of incentives and bonus payments owed to renewable energy system owners that month. The account, which had a total deficit of €385 million at the end of April 2013, is now positive at roughly €1,653 million. As a result, the EEG levy account improved by €2 billion over the past 12 months. "

 

[JulyWebb]

Powerway acquires large scale PV-Project in Algeria 
 
 http://www.pv-magazi.../#axzz31cCUxspz

It looks like YGE will supply the modules http://www.photon.in...photon?id=85416

[sunnysky]

Green Energy News Review: NATO warns of military security breakdown due to global warming

http://www.solarpowe...n=news-rss-feed

[abcdefgjoho]

some german news. translate with google if you want.

1) 9.2% of italian energy needs coverd by solar solar in april.

together with water power, wind and geothermanl 40% of italian energy needs were covered by renewables in april.

so much for the discussion if renewables can be the way. I say it is already there.

http://www.solarserv...rombedarfs.html

 

2)

on 11th may 67% of german energy needs were covered by solar and wind.

15gw solar, 22 gw wind.

prices on energy stock exchange moved to negative during that day...

http://www.solarserv...rombedarfs.html

67% was the top. average over day was 48% of all german energy needs.

 

3) 418 MW installed in india in march. solar pv and solar thermal. new record.

http://www.solarserv...uen-rekord.html

 

india becomes a signficant market.

 

4) rec solar on german subsidy cuts for solar. solar power to stay attractive even with cuts. amortisation will take a bit longer but the overall picture of reducing energy costs with solar will stay the same for private and comps.

http://www.solarserv...-attraktiv.html

 

subsidy times will come to an end and will not be needed in a not too far future. if we get better storage tech, then we will see solar 2.0 I say.

remember we are at around 30 eurocent energy prices for privates here...

 

5) german subsidy cuts far from being fixed. states opposing cuts again - seems majority of states will oppose the proposal which then basically means they cant get into law as states will be needed.

we will get what we saw x-times before. a harsh proposal from main gov which will then be softened after consultation with states.

states need renewables for jobs, taxes of comps and so on.

so cuts wont come as harshly as feared.

http://www.solarserv...versorgung.html

 

overall dont underestimate the EU market. we have sky high energy costs and almost no own source of power (like coal, oil, gas). renewables will stay here. the EU market will stay.

[Scsnospam]

Not much comment on the solarzoom module price data that eysteinh quoted? Is the 56c figure a blip? What could be causing this dip?

[eysteinh]

0.58 scnospam for chinese c-si not 0.56. 0.56 is my limit to where i estimate global asp will fall lower than my model for JKS estimated earnings of 0.6 is at.  (So basically I have been expecting a price drop like this as  it is assumed in my model and the reason I hold jks over companies like TSL etc.)  At that point I would start to consider if I should sell my JKS due to me miscalculating the market - but we are far far from that point. 

Anyhow my comment is that I think what is said in conference calls is correct, lower demand in first half and higher demand in 2nd half of 2014. I also find it interesting it is so big gap between mono and multi currently and speculate its because of direct generation trend. Also from a very simple market perspective prices should stabalize at 0.6 as this is estimated the 10% difference in feed in tariff + a 2 cent cost reduction due to average cost reduction of producers. This assumes BoS producers take zero of the cost so real asp could stabalize at a higher price point later. (perhaps 0.63-0.64)  Complicating things sligthly is the direct generation subsidy so again this is why I see more mono sales for dg as high efficiency modules is a must with DG since rooftops in smaller spaces near a grid in general have higher BoS costs. 

[Scsnospam]

Thx for correcting the number. Even with 58c price, thats a downward pressure on gross margins. I am not sure why its still falling though. With spring weather, demand should have already picked up. Do you have chart, or a link to one for this pricing?

[eysteinh]

Link to publicly available data:
http://www.solarzoom...le-50611-1.html

As you can see c-si multi is 0.58 and c-si mono is 0.71 for this week period. (huge gap of 13 cents between multi and mono now) I expected asp to drop for China so I did not buy companies who would not have good profit with this asp drop. Granted this seems to be a local China asp drop so far and only for multi as mono has been much more stable. Anyhow it is still inside my range so I am not worried unless we fall outside my estimated range. I would however be worried if I was in a company that when you added 1,5 cent polysilicon costs would not be profitable currently with asps of roughly 0.60-0.62 $/watt globally. This is the reason why I for example am not currently investing in JASO even if it is great value. Too uncertain if they can defend enough earnings going forward with added poly costs and less asp in local market. But ofcourse this is just my opinion and things will probably turn around by Q3 but I feel much more comfortable knowing JKS can do eps of around 4$/share even at the current scenario playing out. The reasons why I did not pick CSIQ over JKS was A) higher mcap with lower production and higher cost B) more legal quarrels with uncertain one off effects and C) more cash requirements to keep high margins due to it being depending on building more projects as asp is declining for projects in Canada and Japan. With that said CSIQ looks strong since they will benefit a lot from a us tariff closing of taiwan if that happens and given the very global project park they are not hit by a slowdown of asp as much as others. Jaso on the other hand is so low mcap that even with low earnings they prove value so also quite ok but low EPS with this current scenario playing out, anyhow that is my reasoning why JKS above these others. HSOL YGE etc I would be carefull with. Can hsol keep profitable if asp drops? YGE's plan of profitable q2 is not looking good with current asp. CSUN same. TSL a bit more global and selling some project so I think they will be OK but not on pair with JKS for earnings this year.

My personal opinion is we will see ASP climb up again during Q3 to above 0.6 levels and CSIQ, TSL, JASO, HSOL and JKS should be profitable. But I have invested on worst case scenario as my basis so I would not be negativly suprised. (Prepair for worst hope for best.)

[pgo]

For the market, this price drop does not go well. It will add one more item to worry about investing in solars. 

 

The price drop says a few things though: That the small players are still around. And somehow surviving. And that china demand for Q2 is soft unlike some news that demand kicking in starting May. Both are things of concern.

[eysteinh]

I do not see how asp drop makes small players any more or less around. It simply means demand was lower than supply in china currently. Jaso said in cc end of may demand picks up. Price drop is a concern if your in a company that cannot profit in such an environment

[eysteinh]

I do not think jks is immune I have already added 1.5 cent to cost based on solarzoom public data. Gm should remain high due to income from fit and retainage. Anyhow great if we have diffent oppinion. Result is here soon so we can see what is correct.

[Scsnospam]

This year is turning out to be a grind. I guess the easy money was made last year.

[odyd]

It sounds as you see the same GM for Q1 as it was in Q4. I think there will be a change but I think the factors you described will cover the potential drop due to China ASP.

[odyd]

 

This year is turning out to be a grind. I guess the easy money was made last year.

 
I know this has been said every time we drop two steps down and climb one step up, but certainly H2 is going to be better in results. I hope we do not get tired of being beat on all the time.

[Scsnospam]

I do expect H2 to be better. I just meant that days of 2x to 10x/year returns are gone. On top of that, solars are extremely volatile. So, not a whole lot of gain for a lot of stomach churning ! Case in point is CSIQ/JKS. Even with the pre announcement with confirmation of whole year guidance, with analysts keeping their $50 price targets, we are on pins and needles wondering what ER will bring.

[sunnysky]

India said to find SunPower, other U.S., Chinese panel makers dumped solar products onto market

http://www.mercuryne...er-u-s-chinese?

 

Interesting that everyone is finding everyone else dumping. Is it strange that I find this might be in fact helpful since people would realize the craziness of all these existing or lingering cases, and thus work together for a global solution?

[odyd]

That is pretty sad, but India had been a difficult market for most companies. Low prices, lack of commitment to FiT, changes every opportunity. Of course for us it is another obstacle to deal with.

[JulyWebb]

Just stick with those that have yet to be appreciated for their downstream project development in the making and you'll be alright. In the meantime tricks from the Trading Bots may exist. Who do I name here JASO and HSOL.

[odyd]

No so scaled down Review of March

http://solarpvinvest...eport-q1-review

[eysteinh]

So given australia investigating and india initiating (not sure yet what % tariff is) we should be wise to remember that asp in usa could go so much up that the tariff has no reality as shipments will be done as before. In the end it is all about demand and supply, and there is a lot of demand for solar panels. 

 

Anyhow india and australia are both small markets, granted india will grow into a bigger market but looking from a world perspective they are small and most of the world is either open, have tariff deals, or asp is so high that tariff has no real effect. I wrote this piece some 2 years ago about tariff in more countries (but japan was not on the list so conclusion is different from what I wrote): http://seekingalpha....india-and-japan Ofcourse since then a lot happened, the eu deal and markets in general more open even with tariffs so my conclusion was wrong even if I was correct in assuming more tariffs could be coming. (already back then there was rumours of an india anti dumping.)