Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of solar manufacturer Suntech Power
So what: If Europe gets its debt under control, it will be huge for the solar market because developers have had problems getting financing with Europe's financing costs rising almost daily. If things settle down, then attractive feed-in tariff rates will bring demand back quickly, especially in Germany where the feed-in tariff will be reduced dramatically in 2012. Since Suntech is estimating it will sell 63% of its modules in Europe this year, this could be big news.
Now what: We've had hope like this before, and solar stocks have popped like this before, so I'm not jumping for joy yet. But any progress Europe can make in dealing with its finances will help solar manufacturers get through the rough period they're going through right now. Demand is already picking up in China, the U.S., and India, so if Europe can hold its own, companies like Suntech would be much better off.
Interested in more info on Suntech Power? Add it to your watchlist by clicking here.
