Sunday, March 29, 2009

Solar Stocks headed North? Great link....

Great Article on China subsidizing the installation/financing of solar panels. I am going to keep abreast on this story as all the details aren't spelled out. Given the credit crunch going on right now in the world, this is a VERY important announcement and, frankly, a gamechanger for some companies.

China is the #1 manufacturer of solar panels so they do have a HUGE vested interest. Chinese banks also funded quite a bit of the industries growth over the last few years and, from what I have read, some companies aren't generating free cash flow at this time (ie. they are dead if volumes start to decline as their debtloads will kill them). Troubled companies would be stuck with too much capacity, already thin margins due to industry overcapacity and their banks would get negatively impacted in the future.

This is also a way to help keep their exports up while enabling U.S. companies to effectively gain access to credit (because the payback period would be quicker) and save $$$ themselves. This has an impact on our trade deficit with China, an important thing to keep in mind when we hear politicians and their TV ramblings :)

Basically the payback period on solar installations is going to be 1.5 to 2 years now at current electric prices if the math he did is correct.

Keep this in the back of your mind as solar stock prices, from what the article says, appear to be heading north. Due your DD on this one...


Saturday, March 14, 2009

Unemployment + More job losses in 2009

Great article re: the state of the economy and job losses.

Despite a rising stock market this week (+10% - a suckers rally, in my opinion), the below pictures, from the article above, really highlight how quickly the economy has deteriorated. I am now convinced that 10% unemployment is in the cards here in 2009.

Dan Ross