Original post:
FSLR is trading up $9.12 at $116.60. Trina up a buck at $18.95. The Euro up 0.0123 at
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Not a lot of news.When I think I know what's going on* I have to consciously remind myself of General Custer's comment as he rode into the valley of the Little Big Horn, variously reported. Here's Time's version:
"Hurrah, boys,we've got them!, We'll finish them up and then go home."
Another version has him saying "We've got them where we want them."
Greentech reported from the big solar confab in München:
Intersolar 2010: Dispatches from Munich, Part 2
Sharp to sell utility-scale systems for $2.50/W? First Solar likes CIGS. And Renewable Ventures ex-CEO’s new venture.
Intersolar 2010 concluded this past Friday, and there is much to discuss. While a more insightful analysis is on the way, as promised in last week's article, here is more data and chatter from the conference rooms and trade show grounds.
Upstream
* Module producers: See mostly flat pricing through the third quarter of the year. Believe that the fall in demand in Q3 on account of the feed-in tariff cuts will only be incremental. Some, however, foresaw around 5% increases.
* LDK CEO Xiaofeng Peng: LDK is planning on developing projects exclusively in China in an attempt to drive the PV market in that country. The reason, he said, was that there were very few experienced PV EPCs in China, which necessitated downstream movement by a leading upstream company. Says he believes amorphous Si technology has a future, and claims his own family has invested between $400 million and $500 million in Best Solar's amorphous business.
* Trina Solar: The Czech Republic will be 46% of Trina's expected sales in 2010. The U.S. will constitute around 14%. Claims the playing field for Chinese companies vis-a-vis the rest of the world is level, which is met with skepticism by most in the room.
* First Solar President Bruce Sohn: "CIGS looks promising.">>>MORE
Yesterday the Wall Street Journal had an article worth noting:
Alternative-Energy Firms Adapt to Europe's Woes
Europe's economic woes have led Tom Werner, chief executive of solar-panel manufacturer SunPower Corp., to change the way he does business.
Companies in many industries have been affected by Europe's problems, but alternative energy companies are especially exposed. Government subsidies have made Europe a dominant market for alternative energy, and it's the world's biggest solar-power market. Indeed, SunPower gets about half its sales there.
To respond to the problems, CEOs of companies that make solar panels and wind turbines are hedging against currency fluctuations more aggressively, boosting sales in other parts of the world and raising prices. They're also trying to take advantage of lower prices in Europe by purchasing more components and doing more manufacturing there.
A weak Euro means that when sales are translated back into dollars or other stronger currencies, companies get less revenue. The Euro has fallen 16% against the dollar this year.
Euro fluctuations have already cut into profits at some solar companies. Trina Solar Ltd. registered a $14.5 million foreign-currency exchange loss. Reporting its earnings, Trina said the loss was "primarily due to the depreciation of the Euro against the U.S. dollar" in the first period.
At SunPower, a San Jose, Calif.-based maker of solar panels and cells, Mr. Werner says he's looking to generate more sales in the U.S., especially California and New Jersey, where the government is subsidizing solar-power investments. "We're allocating more resources to sales in America," he says. "You have to be diversified to minimize future swings."
The company is also hedging against currency fluctuations more aggressively, and it now hedges all of its foreign currencies in case the Euro's ailments spread.
Mr. Werner is also looking for ways to benefit from the Euro's weakness, including buying more materials like silicon and steel there.
To mitigate losses on translation costs, some companies are raising prices of goods sold in Europe, at least temporarily. John Danner, CEO of Northern Power Systems Inc., says the privately held Barre, Vt., maker of mid-sized wind turbines, which does about a third of its business in Europe, is raising prices in certain instances, in part to offset losses from the Euro's decline.
Suntech Power Holdings Co., a solar-panel maker based in Wuxi, China, registered a $22 million foreign-exchange loss in the first quarter. It is now making a bigger push into other regions, particularly the U.S. In the first quarter, European sales accounted for 70% of its revenue. By the third and fourth quarter, the company plans to decrease that to about 50%. It also plans to triple its U.S. sales from 2009, says Steven Chan, chief strategy officer.....MORE
*In yesterday's post, "Solar: Positive Comments on the Sector from Auriga's Bachman (FSLR; SPWRA; SOLF; TSL; YGE)" I mentioned:
First Solar is up $2.12 at $109.39, Sunpower is up a bit over 4% at $13.19.
I find myself in the odd position of taking the long side of FSLR and SPWRA even though I don't have much love for either of them.*...
...Since we started touting Sunpower on May 26 the Stock is up 31%. Most of the links can be found in:
Inside Scoop: "SunPower Chair's $1 Million Buy " (SPWRA; SPWRB)
In the case of First Solar we used this headline on June 8:
Hapoalim Cuts First Solar Target to $65 on Cadmium Telluride Risk; It Won't Matter and Probably Sets an Intermediate Low (FSLR)
with the stock at $105.35 pre-market.
It did indeed set a low that day, trading as low as $100.19.
These calls were as much a bet on euro strength as anything.
For more, use the Search Blog box, FSLR or SPWRA.
