Following up on this morning's post (Solar: "Solarworld, Phoenix Shares Gain After Merkel Retreats on Cuts " (FSLR)) linking to the Bloomberg story, here's Tech Trader Daily:
Analysts this morning are parsing the fine print of a four-year coalition agreement ratified in Germany today that will likely have an impact on funding for solar technology projects, and on solar technology vendors such as First Solar (FSLR) and SunPower (SPWRA).
As Bloomberg notes, German Chancellor Angela Merkel’s Christian Democratic Union pushed through measures for a $36 billion tax cut meant to spur economic growth, a compromise with more aggressive proposals. The measures relating to solar funding appear vague and thus open to widely differing interpretations.
The agreement does not call for immediate cuts in the so-called feed-in tariff for solar projects, subsidies that have helped boost German investment in the technology, writes Collins Stewart analyst Dan Ries. The agreement “highlights that the coalition is committed to solar and indicates that the government will pursue a dialog with the solar industry and community leaders to determine if the current subsidy is too generous.”
Ries is optimistic, writing that “we do not believe the outcome will be as harsh as the “enormous” one-time cut of perhaps 20-30% reported in the press.”>>>MORE
A small nit to pick to pick with the writer. He says:
...The effects of the a potential tariff cut have already begun to be felt by some vendors. SunPower, for example, last Thursday offered a disappointing Q4 revenue outlook, which some analysts attributed to orders being pulled into last quarter from the current quarter, as projects scrambled to buy panels before tariffs run dry....Whereas on their conference call the company said:
...Our rapid growth and our dealer network allowed us to grow our component segment, business segment 58% in Q3 with a strong surge in Germany as well as share growth in California and Italy....Who knows?