Wednesday, March 12, 2008

Solar: Competition for Thin Film (FSLR; LDK; JASO; SPWR: STP. YGE)

Sorry about the late start, reality intruded.
The WSJ's Environmental Capital blog had an important post on silicon pricing yesterday, good news for the solar companies, not so good for the polySi manufacurers:

Polysilicon Bonanza: Rising Supplies, Sinking Prices

Matthew Dalton reports:

Polysilicon producers have feasted over the past two years on the profits caused by soaring prices for the material, which is a key ingredient of solar cells. As demand for solar energy has soared, the price of polysilicon has gone bonkers, with prices on the spot market ten times as high as they were in 2004.

But the party may be coming to an end: Global polysilicon production is expected to double over the next two years. That should bring some sanity to the market – and cut into the enormous profit growth seen by polysilicon producers over the past two years.

How far will prices come down? Way down, according to a number of market participants. A kilogram of polysilicon can fetch around $475 on the spot market right now. “We believe that long-term the price of silicon should get back to the $50 to $60 per range,” said Mike El-Hillow, chief financial officer of solar cell maker Evergreen Solar, at a conference in February....MORE

Amd from the AP via Forbes:

Sector Snap: Solar Up on Sunny Outlook
Several solar-power stocks posted gains Wednesday after JA Solar Holdings Co. issued a better-than expected 2008 revenue outlook and Suntech Power Holdings Co. said it will raise up to $575 million in capital for supplies and expansion.

JA Solar said Wednesday it expects revenue of $990 million to $1.1 billion this year. That range starts far above analyst expectations of $520.4 million to $936.4 million, according to a Thomson Financial survey.

The company also said it has "sufficient" silicon supplies in place to cover its planned production ramp.

Lehman Brothers (nyse: LEH) analyst Vishal Shah was encouraged by the "magnitude of upside" to JA Solar's outlook and said its gross-margin outlook of "above 20 percent" this year is likely conservative....MORE