By Eric Savitz Solar shares are getting hammered today as the sector continues to factor in the impact on financial results of weakness in the Euro. Wells Fargo analyst Sam Dubinksy noted in a research report this morning that most solar vendors generate the majority of sales in Euros, with costs denominated in dollars or renminbi. A weaker Euro, he notes, results in weaker pricing and margins for the solar manufacturers.
Barclays Capital analyst Vishal Shah writes today that the high cost burden of solar subsidy costs remains “too large to ignore” for many European nations; he sees risks to the existing solar subsidy structures in Italy, Spain the Czech Republic and other countries. Shah also sees risks of a slowdown in 2011 demand if the Euro/dollar exchange rate drops to 1.20 and if Chinese companies can’t lower prices in Euro terms.
Update: Also pressuring solar shares are today’s big drop in crude oil prices; crude has dropped under $70 for the first time since December.
Who cares that SPWRA hedge best or worest!!! If you agree that Europe is in trouble then solar can not get government incentives anymore. It is simple that they can not sell more and stock will keep dropping!!!
Why do you make the assumption that EU austerity programs (cost cutting to annual budget spends) will include them hauling in all incentive programs for solar capital spend support ?
Alternative energy is a means by which the EU has determined will cost them overall LESS dollars in the future
Isn't 10% to 15% target figures being thrown out from North America to China to the EU with regard to minimum levels of alternative energy generation ?
Do you assume a complete abandonment to these incentive programs ?
Global governments are looking to new technology (anywhere) in an effort to identify opportunities where new job creations could be stirred up ..... alternative energy has been identified in the US for its ability to create new jobs in a new future in support of ethanol production, solar and wind energies, nuclear, etc.
Aren't you projecting a 'sky is falling' approach ?
What actual cost to the EU budgets is a result of support of solar ? There is a payback to those government incentive spends compared to other budget spends which may have far less offsetting paybacks