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This Week in Solar

Travis Hoium
April 14, 2012

Solar stocks stopped their recent slide this week as news started leaking out that the first quarter may not be too bad after all. First Solar's (Nasdaq: FSLR  ) shares jumped on Wednesday, after inverter manufacturer Satcon Technology announced that bookings were up significantly over the fourth quarter.

It'll be a few weeks before we hear how earnings were, but news from solar's biggest markets isn't too bad for now.

Germany's solar demand hanging in
The cloud hanging over solar this year has been in large part due to Germany's feed-in tariff cuts that were expected to take place in the first quarter. A 3 GW boom in installations during December had politicians concerned that solar was growing too quickly for the country.

Planned cuts aren't coming together as anticipated, and that's put more solar power in the field than the industry probably expected. Solarbuzz recently said that Germany probably installed more watts of solar in the first quarter than half of 2011. That would mean installations approached and maybe exceeded 4 GW in the quarter, which would be great for manufacturers. A slowdown in Germany was the biggest threat in the first half of 2012 and should be mitigated by increased demand in the U.S., China, and India in the second half of the year.

Polysilicon makers wave the white flag
The biggest driver of the falling cost of solar modules in the past few years has been the falling price of polysilicon, which has accounted for a large portion of a module's cost. This drop in prices has been great for the industry, but the underlying reason for the drop has left manufacturers of polysilicon holding the bag. A massive amount of oversupply has left carnage across the industry that makes the number of solar bankruptcies look paltry.

Greentech Media estimates that only six or seven polysilicon manufacturers are left in China, down from more than 40. Renesola (NYSE: SOL  ) and LDK Solar (NYSE: LDK  ) are two of the survivors, for now, but their financial situations have gotten worse over recent quarters. But this may provide an opportunity.

China is increasingly supporting larg