Loans, Tariffs Move Chinese Solar Shares (CSIQ, STP, TSL, FSLR, ESLR, EMKR, WFR, STRI, ENSL, SPWRA)
Earlier this week, Forbes noted that Canadian Solar (CSIQ) would send some of its manufacturing to Ontario in order to capitalize on feed-in tariffs only accessible for companies producing 60% of output in the province. The report noted that no location had been disclosed, but that it would employ approximately 500 people. This morning, Canadian Solar reiterated its plan to build a module manufacturing facility in Ontario, explaining that it expects the plant to be completed by 2011, and the province is apparently pleased with the initiative, offering 176 MW in distributed solar power projects via a feed-in tariff program for completion in 2011 and 2012.
As of Monday’s closing bell, the Chinese Solar Stocks Index had outperformed the S&P 500 by 4.2% over the past month. The country’s manufacturing cost advantages have been touted by analysts and the media recently, and yesterday’s Forbes report covered billions of dollars of government loans that will provide further advantage to these companies moving forward.
Suntech Power Holdings (STP), China’s largest solar play by market cap, is set to receive $7.3 billion and Trina Solar (TSL) will get $4.4 billion, according to the report. Meanwhile, Forbes noted that “generous U.S. government subsidies are slated to wind down at the end of this year,” which could make it even tougher for First Solar (FSLR), Evergreen Solar (ESLR), and other domestic components of the broader Solar Stocks Index.
Over the past month a number of North American solar players are among the sector’s top performing stocks, including small-cap semiconductor company EMCORE (EMKR), MEMC Electronic Materials (WFR), and STR Holdings (STRI), which have added more than 10% for the period. Elsewhere, however, Entech Solar (ENSL), SunPower (SPWRA), and Evergreen Solar have all slipped by double-digits over the same duration while all nine Chinese players are in positive territory.
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