First Solar Et Al. Slide On Italy’s Proposed Subsidy Cap (FSLR; STP; TSL; YGE; SPWRA)

From TechTrader Daily:

Shares of solar technology providers have come under substantial pressure today following a draft proposal by Italy‘s Ministry of Economic development, which some on the Street believe could sharply curtail demand for solar panels in the market that has been the most vibrant for the industry in the last several months.

The ministry’s draft proposal, viewable here, was covered over the weekend by the Italian press, with headlines such as “Fewer Incentives on Photovoltaics,” and even claims by some in Italy that the new rules would be equivalent to breaking the renewable energy industry in the country.

is expected to be considered by Italy’s Cabinet on Tuesday. If it does not meet with objection, it may be passed into law as soon as Thursday, writes Morgan Stanley analyst Smittipon Srethapramote.
Srethapramote,  after looking through the report, notes that not only does it propose suspending subsidies for solar installations once installations of 8 gigawatts of capacity are installed in Italy, but it also introduces some restrictions he had not expected. There would be a cap placed on ground-mounted plans on farmland, and there would be a maximum ratio set of 100 kilowatts of installation “per hectare for ground-mounted plants on farmland.”

The upshot,  Srethapramote thinks, is that if “left unchanged, these provisions could lead to a dramatic slow down in the Italian market.”  Srethapramote thinks that First Solar (FSLR) and SunPower (SPWRA) will be less adversely impacted than other solar names, given that there they have sources of revenue from other markets, such as the U.S. However, he also argues that “they will still likely suffer some degree of multiple compression in the coming months as volume and pricing expectations for the group are reset.”....MORE

The post links to a Barron's Feature that we happened to catch a couple weeks ago, it is worth the read for those beholden and those who be holdin'.