Wildly Contrasting Fortunes in The World's Solar Energy Business
One of the most volatile sectors in the stock market surpassed itself last week with the mixture of good and bad news it produced. The solar industry lurched from the approval for a PV project nearly eight times the size of the largest currently operating in the world, to a bankruptcy filing by a well-known manufacturer, with much else in between.
The worst news came from Evergreen Solar, the US module maker, which announced on Monday that it is filing for Chapter 11 bankruptcy. It also said it planned to sell itself by auction in order to repay creditors owed USD 485.6m.Evergreen claims to use “significantly less polysilicon” in its solar wafer manufacturing process than its competitors do.
However it has seen its shares plunge 99.8%, from a high on Boxing Day 2007 of USD 113.04 to just USD 0.18 this week, and a statement from chief executive Michael El-Hillow blamed its crisis on “massive overcapacity” in the solar industry.
There was also worrying news from German solar manufacturer Q-Cells, which last Wednesday said it expected to make a full-year operating loss in the “three-digit million euro” range.
Q-Cells’ share price journey has been almost as precipitous as Evergreen’s, its shares falling 98.8% from a high of EUR 80.94 – also in December 2007 – to EUR 0.94 this week.
The latest price values the company at EUR 166m.Its “realignment programme” unveiled last week has as its objective a reduction in the costs of production for cells and modules, via cutbacks in production capacity at its headquarters in Bitterfeld-Wolfen, Germany, and a 25% to 30% fall in corporate administration costs.
Q-Cells’ news was not all bad – it said it would run at full capacity at its Malaysian factory in the second half of this year, and it posted posted a sharp rise in revenues in the second quarter to EUR 316m, from EUR 125.1m in the first quarter.Another German company, SMA Solar Technology, trumped this easily by reporting much-better-than-expected first half results.
The company, the world’s leading maker of PV inverters, said it expected a notable increase in global demand over the summer months, with prices stabilising.
In the first half of 2011, SMA sold 3.1GW of inverters, the same as in the equivalent period of 2010.Pierre-Pascal Urbon, chief executive, said in the company’s statement: “The broad social consensus that now surrounds the intensified expansion of photovoltaic energy, the favourable interest level and the significantly reduced specific costs of constructing a solar power plant compared with the beginning of the year are good conditions for a significant rise in global demand in the second half of the year.”
SMA’s share price performance stands in stark contrast to that of Evergreen and Q-Cells. Floated in 2008, SMA hit a high of EUR 103.70-a-share in January 2010, and had slipped only 29.7% to EUR 72.95 by this week. The company’s market capitalisation is EUR 2.5bn.Other cheering news for the solar sector came from the project development side.
In India, the 125MW Shivajinagar Sakri project in Maharashtra received a pledge for EUR 250m worth of lending from German development Bank KfW.And in the US, the Department of the Interior approved the construction of a 550MW PV project in southern California.
The project, Desert Sunlight, would dwarf not just the one in India but also all current operating PV plants, the largest of which are in the 70MW to 80MW range.
The approval for Desert Sunlight, coming two months after the award of a USD 1.9bn conditional loan guarantee from the US Department of Energy, helped shares in its developer, First Solar, to rise 6% last Thursday.First Solar said in a statement that the PV project would “create more than 630 jobs at peak construction and infuse an estimated USD 336m into the local economy”.
It added: “The Bureau of Land Management worked in close coordination with Desert Sunlight, the National Park Service and other stakeholders to significantly reduce the proposed project’s total footprint from 19,000 acres down to 4,144 acres.
In addition, the BLM is requiring that Desert Sunlight provide funding for acquisition and enhancement of more than 7,500 acres of suitable habitat for desert tortoise and other sensitive wildlife species to help mitigate the project’s potential impacts.”
The worst news came from Evergreen Solar, the US module maker, which announced on Monday that it is filing for Chapter 11 bankruptcy. It also said it planned to sell itself by auction in order to repay creditors owed USD 485.6m.Evergreen claims to use “significantly less polysilicon” in its solar wafer manufacturing process than its competitors do.
However it has seen its shares plunge 99.8%, from a high on Boxing Day 2007 of USD 113.04 to just USD 0.18 this week, and a statement from chief executive Michael El-Hillow blamed its crisis on “massive overcapacity” in the solar industry.
There was also worrying news from German solar manufacturer Q-Cells, which last Wednesday said it expected to make a full-year operating loss in the “three-digit million euro” range.
Q-Cells’ share price journey has been almost as precipitous as Evergreen’s, its shares falling 98.8% from a high of EUR 80.94 – also in December 2007 – to EUR 0.94 this week.
The latest price values the company at EUR 166m.Its “realignment programme” unveiled last week has as its objective a reduction in the costs of production for cells and modules, via cutbacks in production capacity at its headquarters in Bitterfeld-Wolfen, Germany, and a 25% to 30% fall in corporate administration costs.
Q-Cells’ news was not all bad – it said it would run at full capacity at its Malaysian factory in the second half of this year, and it posted posted a sharp rise in revenues in the second quarter to EUR 316m, from EUR 125.1m in the first quarter.Another German company, SMA Solar Technology, trumped this easily by reporting much-better-than-expected first half results.
The company, the world’s leading maker of PV inverters, said it expected a notable increase in global demand over the summer months, with prices stabilising.
In the first half of 2011, SMA sold 3.1GW of inverters, the same as in the equivalent period of 2010.Pierre-Pascal Urbon, chief executive, said in the company’s statement: “The broad social consensus that now surrounds the intensified expansion of photovoltaic energy, the favourable interest level and the significantly reduced specific costs of constructing a solar power plant compared with the beginning of the year are good conditions for a significant rise in global demand in the second half of the year.”
SMA’s share price performance stands in stark contrast to that of Evergreen and Q-Cells. Floated in 2008, SMA hit a high of EUR 103.70-a-share in January 2010, and had slipped only 29.7% to EUR 72.95 by this week. The company’s market capitalisation is EUR 2.5bn.Other cheering news for the solar sector came from the project development side.
In India, the 125MW Shivajinagar Sakri project in Maharashtra received a pledge for EUR 250m worth of lending from German development Bank KfW.And in the US, the Department of the Interior approved the construction of a 550MW PV project in southern California.
The project, Desert Sunlight, would dwarf not just the one in India but also all current operating PV plants, the largest of which are in the 70MW to 80MW range.
The approval for Desert Sunlight, coming two months after the award of a USD 1.9bn conditional loan guarantee from the US Department of Energy, helped shares in its developer, First Solar, to rise 6% last Thursday.First Solar said in a statement that the PV project would “create more than 630 jobs at peak construction and infuse an estimated USD 336m into the local economy”.
It added: “The Bureau of Land Management worked in close coordination with Desert Sunlight, the National Park Service and other stakeholders to significantly reduce the proposed project’s total footprint from 19,000 acres down to 4,144 acres.
In addition, the BLM is requiring that Desert Sunlight provide funding for acquisition and enhancement of more than 7,500 acres of suitable habitat for desert tortoise and other sensitive wildlife species to help mitigate the project’s potential impacts.”
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