earth2tech asks "Is It a Solar Bottom? Analysts Say No".
This weekend in a major piece, Barron's said:
Nightfall Comes to Solar Land
A glut of silicon threatens First Solar -- and other low-cost panel makers.
A YEAR AGO, REFINED silicon for solar cells cost 450 bucks a kilo on the spot market. You can have it today for closer to 100 and if you wait a month it may be cheaper still. Thanks to the workings of international capitalism, the 90% margins available in last year's market spurred silicon-factory expansions around the planet. But the new supply arrived just as end-market demand for solar panels got eclipsed by faltering government incentives, lower oil prices and the world financial freeze.
Cheaper solar silicon is of course a great thing for the planet's living creatures. But solar companies and investors who planned for silicon that was scarce and high-priced must adjust their business models for a glut that looms larger than most anyone expected. New government subsidies will help in the U.S. and in China, which energized solar stocks last week with a plan to help China's struggling photovoltaic industry. Lower prices will also stimulate sales volumes as solar panels become cost-competitive with fossil-fueled power. The question is whether solar energy's volume producers will end up resembling the high-margined Intel or the profitless memory-chip makers. "An industry with 30 suppliers would be a nightmare," says analyst Dan Ries of the brokerage firm Collins Stewart. The "flash-memory market managed to be a nightmare with just 2½ suppliers.">>>MORE
Meanwhile Scientific American had a piece last week:
Why the difference? First off, companies can do well as stocks languish. You knew that. And SciAm doesn't employ many analysts. Second is a misperception of the stimulus' effect on solar: It's not going to be as big a many had dreamed. These are rent-seeking businesses, if government largesse is directed at job creation, it is not directed at profit maximization. I had a comment at Environmental Capital back in December to make the point:
Comment by - December 10, 2008 at 11:49 am
Third, it is no longer a homogeneous, run with the pack, industry. The Chinese solar's will be favored by the Chinese government. And catch a break from the decline in silicon costs. Investors are going to have to know what differentiates these companies, it's not 2007 and never will be again.