Wednesday, May 6, 2009

China solar set to be 5 times 2020 target (LDK; TSL: YGE)

The Chinese solar's continued their outperformance vs. their American competitors today:

LDK up 11.74%
Trina up 10.48%
Yingli up 8.13%

First Solar up 3.58%
SunPower up 2.35%
Energy Converson down 2.60%
Here's the story from Reuters:

* Stimulus package for renewable energy expected soon

* Renewable energy 2020 goal will more than double 2007 plan

* Solar subsidies attractive but not immediately feasible (Adds comment on solar subsidy plan)

By Rujun Shen and Jacqueline Wong

SHANGHAI, May 5 (Reuters) - China is set to smash its target for a roll-out of solar power by 2020 more than fivefold and possibly even tenfold, a researcher with the National Development and Reform Commission, the economic planning ministry, said on Tuesday.

Under the NDRC's renewable energy plan set out in 2007, China would have 1,800 megawatts of installed solar capacity by 2020.

But Wang Zhongying, assistant director at the NDRC's Energy Research Institute and head of its Renewable Energy Development Centre, said the country was likely to far exceed that.

"The goal that we made originally is probably too low," he said at a solar energy conference in Shanghai. "By 2020, we can reach 10,000 MW or more."

He cited an international aspiration for countries to get 1 percent of electricity from solar by 2020, which would mean a target of 40,000 MW for China, which he said was too high.

"China could reach 10,000 MW or higher, maybe 20,000 MW."

He stressed that the forecast was his own opinion and not an official target.

At the end of 2008, solar power capacity attached to the grid was less than 100 MW, or 0.01 percent of China's entire installed capacity.

China is massively dependent on coal, used to generate around 80 percent of its power, but hopes to lessen coal's dominance by using more hydro, wind, nuclear and biomass.

The government is expected to unveil an economic stimulus package for renewable energy within the next few months.

Shi Dinghuan, president of the Chinese Renewable Energy Society, said the 2020 goal for renewable energy would be revised under the new stimulus plan to more than double the 2007 plan.

Even with a tenfold increase in its 2020 target, solar would play a much smaller part in China's overall power mix than those other energy sources. Under the original plan, biomass and wind were set to reach 30,000 MW by 2020, with nuclear at 40,000 MW. Continued...

We first noticed the divergence at the end of March and posted "A Bifurcated Market in Solar Stocks (ENER; FSLR; LDK; SPWRA; TSL; YGE)" . Here are the charts:

Five day chart via Yahoo Finance:

Chart for Trina Solar Ltd. (TSL)
And the three month chart:
Chart for Trina Solar Ltd. (TSL)