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We are abandoning our idea to selectively establish long-positions with certain names within the solar sector. Investor sentiment is at an all-time low and looks to only sour more as we approach the third quarter earnings period. We withdraw our previous idea to selectively buy a few names for a 2H11 trade into a solar “gold-rush” as our early signs of improving fundamentals appear to now be a mirage rather than an oasis.
Feed-in-tariffs (FiT) as incentive mechanisms are increasingly gaining popularity. China recently announced a new feed-in tariff scheme for PV to complement its rapidly expanding module manufacturing capacity. Other countries such as Germany and Italy, which have established FiT schemes, nevertheless are continuously adjusting the FiTs to encourage balanced growth in the market. But in the future, will designing FiTs be the sole important factor affecting the growth of photovoltaics in the developed PV markets?
As leading CIGS manufacturers and equipment suppliers in Europe prepare for quarterly and half-year reporting during August, the impact of Veeco’s parting comments may force a closer examination of existing market-share adoption rates and business-unit operating margins. The company’s rationale for exiting the CIGS systems business was based on its assessment that “the timeframe and cost to commercialization [of CIGS tooling] are not acceptable,” coupled with “the lower-than-expected end-market acceptance for CIGS technology.” Rather than speculating whether Veeco’s prepared remarks will—or will not—have any tangible effect on investor confidence levels across the CIGS community as a whole, it is perhaps more prudent to revisit the fortunes of other PV equipment suppliers that have been championing CIGS in support of dedicated product portfolios offered to the market.
As PV manufacturers prepare for Q2’11 reporting, the need to understand accurate industrywide capacity levels has become essential. Currently, much of the industry is addressing the prospect of widespread production cutbacks to allow record module inventory levels to be worked through. While in contrast, some Tier 1 producers continue to operate at close to full capacity utilization.
The UK solar industry’s worst fears have today been realised as Government ploughs ahead with its proposed feed-in tariff cuts. Paying absolutely no attention to industry’s kicking and screaming, the Department of Energy and Climate Change (DECC) has kept to its original plan and imposed ridiculously reduced rates of as little as 8.5p per kilowatt hour.
Guest blogger Glenn Harris of SunCentric believes that the goals of the ongoing California Solar Initiative program will not be achieved based on a close reading of the latest data. He says that based on his group’s analysis, “we see no meaningful signs of acceleration that would allow us to project that the program can meet its requirement.”
In reporting Q1’11 results on May 13, 2011, Roth & Rau highlighted year-on-year revenue growth for group activities (including PV) of 69.1% - from €35.3 million in Q1’10 to €59.7 million in Q1’11. Indeed, analogous to other PV companies recently across the value and supply-chains, emphasis was placed on year-on-year comparisons, not on quarter-on-quarter changes from the preceding reporting period Q4’10…
Centrotherm Photovoltaics has released its Q1’11 results, highlighting strong year-on-year revenue and bookings performance compared to Q1’10. Revenues grew year on year by 64.2% to €189.3 million, while new orders increased by 187.8% to €224.3 million. However, a more appropriate comparison comes by looking at quarter-on-quarter trends - in particular how Centrotherm’s PV book-to-bill is tracking – and in understanding trends within the industry driving these metrics.
As we all try and pick ourselves back up from recent knockbacks in the UK’s renewable energy sector, it’s rather worrying to find out that we actually missed our renewable energy target for 2010 by 3.5%. As a result, the levels of confidence we have in reaching the much larger, more daunting target set for 2020 are plummeting by the second.
Since the fast track review bombshell was dropped last week I have been thinking about what kind of implications this will have on the UK solar industry as a whole—not just how it will affect the large-scale market. As we all know, one of the many things this country’s renewable energy industry lacks is experience, which is why it was so encouraging to see some of the world’s largest and most influential solar players step onto British soil.
