The post immediately below "Solar Stocks: Debating China’s Subsidy Program" links to three of Barron's Tech Trader Daily's posts on the action in the Chinese solar stocks. In another part of the Dow Jones empire the WSJ sounds a cautionary note:
Getting too close to the sun can singe your wings, investors in the solar-panel sector are sure to learn.
Beijing's pledge to subsidize up to half of the cost of installing solar panels raised euphoria in the sector to a new pitch this week. On Thursday, New York-listed shares of Chinese solar-cell companies surged. On Friday those gains continued in shares of solar-panel makers from Mumbai to Tokyo.
This short-term excitement belies some key long-term risks. Namely, the rush of companies entering panel production is reminiscent of the now oversupplied flat-panel and semiconductor markets. Companies in those sectors are losing money faster than they can raise it....
...News of China's subsidy trumped all this. Solarfun's shares rose nearly 42%, and Suntech's 43%. Elsewhere, Webel rose 11%, and Hong Kong's Solargiga Energy jumped 21%.
But this sensitivity to subsidies can also bite. In Japan, nearly 90% of demand is for residential use and extremely sensitive to installation costs. When photovoltaic subsidies ended there in 2006, sales nose-dived 27% the next year, Macquarie says.
This is one investment best made with a thick layer of protection.
HT to a third part of the imperium: Environmental Capital
Now if MarketWatch should weigh in; Oh wait, here's "Analysts are cautious on the solar stock rally"
I'll go check some of the other services offered by the behemoth. Back in a bit.