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This Week in Solar

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September didn't start off on the right foot for solar stocks. Question marks about European demand helped push stocks lower as investors contemplated the recent run-up in shares. But shares recovered nicely on Thursday, when the European Central Bank announced an open-ended bond purchase program, and most stocks are now trading about where we started the week.

Here is what's driving solar stocks.

Germany's market transition
One of the interesting developments in solar this year is the German market's move more toward a sustainable model rather than a subsidized model. I've reported in the past that feed-in tariff rates are now below electricity rates, meaning it can be more cost-effective for residents to just use solar to save on electricity bills.

In the short term, this causes panics every once in a while, but ultimately, this level of grid parity is what will drive the solar industry to new heights and may push the next era of renewable-energy development: energy storage. Germany installed another 4.3 GW of solar in the first half of the year, and at this rate, the country will be getting most of its daytime power from solar by the end of the decade.

Europe picks a fight with China
The U.S. tariffs on Chinese manufacturers aren't the end of the battle over Chinese exports. Europe launched an investigation into subsidies for Chinese solar companies and accused them of dumping as well.

Trina Solar (NYSE: TSL  ) , Yingli Green Energy (NYSE: YGE  ) , and others say that they aren't dumping, just competing in a tough environment. With European companies such as Q.Cells being sold to Asian suppliers after running up massive debts, it's going to be a hard sell to the EU. Get a more detailed analysis.

News and notes
Here's what else happened this week in solar.

  • Suntech Power's (NYSE: STP  ) chief commercial officer, Andrew Beebe, resigned this week following a string of issues at the company. The company's CEO stepped down a few weeks ago, and this can't be seen as a good sign.
  • First Solar (Nasdaq: FSLR  ) signed a 25 MW supply contract for a project built by Germany's Juwi Holding AG in India.
  • Canadian Solar (Nasdaq: CSIQ  ) will supply the first and largest government PV project in Turkey, a whopping 96 kW deal. That may sound small, but it opens up another market to solar.
  • Suntech signed a 26 MW contract to supply panels for use in Solarstrom AG's power plants in Germany.

That's all for this week in solar. If you haven't checked out our new premium report on First Solar, find out what it's all about. It's full of information about the company's potential as well as the challenges it faces -- all things that investors should know.

Fool contributor Travis Hoium has no position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.

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