This Week in Solar

This week was one of the most eventful weeks for the solar industry since I started covering the industry for The Motley Fool in 2010 -- and that's saying something. There was a very important industry report released, Suntech Power (NASDAQOTH: STPFQ  ) is flirting with bankruptcy, and more earnings reports were published. Here are the most important items of the week.

Solar booming in the U.S.
If you're a solar investor, or even just a solar observer, here are some great stats to throw around when you discuss solar with a naysayer. These come from the recently released U.S. Solar Market Insight Report for 2012 from GTM Research and the Solar Energy Industries Association.

  • PV installations grew 76% in 2012 to 3,313 MW. By segment, residential grew 62% to 488 MW, non-residential grew 26% to 1,043 MW, and utility-scale solar grew 134% to 1,781 MW.
  • Installed prices for PV systems fell 27% in 2012. By segment, residential solar system costs fell 18.1% to $5.04 per watt, non-residential costs fell 13.3% to $4.27 per watt, and utility costs fell 29% to $2.27 per watt.
  • GTM Research expects 4.3 GW of solar to be installed in the U.S. in 2013, up 29% from 2012. This includes strong growth in residential and non-residential and a slowing of utility solar growth. From 2013 to 2016, GTM Research expects the compound growth rate for solar in the U.S. to be 28%.
  • The states with the most installations in 2012 were California (1,033 MW), Arizona (710 MW), New Jersey (415 MW), and Nevada (198 MW).

These are extremely strong numbers for U.S. solar and all signs point to more growth in the years to come.

Suntech to investors: Go Away!
It's been an interesting week for Suntech Power. On Monday, the company said it had reached a forbearance agreement (a delay in payment) with 60% of lenders on $541 million of debt that is due today, which it thinks means that it can delay payment of all the loans. Mid-week, analysts and lawyers analyzing the situation discovered that unless all investors agree to the forbearance the company will have to pay investors when their notes are due. Rumors began flying that the local Wuxi government would bail out the company, since the central government said that it would not. Some sort of default seemed likely, whether Suntech went kicking and screaming or not

The best part of this drama is the release last night from Suntech in relation to "unusual trading" of its stock. In reference to the notes due today, the company said that it "does not plan to make such payment and the Company's management is not aware of any pending or planned actions or claims in relation to such non-payment by the trustee or the holders of the Notes." In other words, we're not paying you: Go away! 

I expect legal action by bondholders in the next few days, if not in the next few hours. This isn't over and it doesn't look good for Suntech, no matter what happens.

News and notes
There were a few important earnings reports this week. Here's what happened:

Canadian Solar (NASDAQ: CSIQ  ) reported fourth-quarter earnings and revenue fell 37.8% to $294.8 million. Gross margin was 5% and the company lost 104.9 million, or $2.43 per share, in the quarter. Net debt was $970.8 million to end the year.  

Renesola (NYSE: SOL  ) also reported results and revenue was up 63.3% from a year ago to $306.5 million on a 110% jump in total shipments. Gross margin was 3.3%, up from a year ago but still an unsustainably low number. The company lost $49.8 million, or $0.58 per share, and net debt stood at $633.7 million at the end of the quarter.  

MEMC Electronic Materials (NYSE: SUNE  ) announced its intention to change its name to SunEdison and released outlook for 2013. It expects semiconductor revenue of $940 million-$990 million, up from $918 million last year. Systems sold will be 420 MW-490 MW from 383 MW in 2012, and costs will fall from $3.79 per watt to $3.10-$3.40.  

JA Solar (NASDAQ: JASO  ) announced that it began shipments to 35 MW worth of projects in Israel built by Siemens

Foolish bottom line
The earnings numbers out of China continue to be terrible and I see no signs of improvement any time soon. If Suntech does go under it may ease some of the oversupply in the industry, which would actually be good for everyone else, including Chinese suppliers. Check back to Fool.com for the latest on Suntech over the next week as this strange story unfolds.

A profit in solar?
Investors and bystanders alike have been shocked by First Solar's precipitous drop over the past two years but this is still one of the only companies making a profit in solar. The stakes have never been higher for the company: Is it done for good, or ready for a rebound? If you're looking for continuing updates and guidance on the company whenever news breaks, The Motley Fool has created a brand-new report that details every must know side of this stock. To get started, simply click here now.

 


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