This was a busy week in the solar industry, so let's get right into it.
The start of a solar war
This week, the Coalition for American Solar Manufacturing, a group of seven U.S. solar manufacturers led by SolarWorld, filed a petition with the U.S. Department of Commerce and International Trade Commisssion to "seek relief from China's illegal trade practices."
The group accuses China of massive subsidies for the solar industry and manufacturers of dumping product at artificially low prices in the United States.
Chinese subsidies, namely massive loans to build incredible amounts of supply, have been one of the main drivers of the falling cost of solar power around the world. You can call that illegal (which is probably is), but it's also helping the industry grow. Solar power wouldn't be nearly the price it is today if it weren't for Chinese manufacturers, and that's creating jobs designing, installing, and maintaining solar installations here in the United States. No, we aren't building the panels here, but that will change long-term.
It's also important to note that SolarWorld was the only company with the guts to name itself in the petition. The six other companies involved in the coalition didn't step forward. Are they mom-and-pop shops or legitimate manufacturers like First Solar (Nasdaq: FSLR) and SunPower? We may never know.
Yingli Green Energy (NYSE: YGE) responded by saying it was committed to the U.S. market but fell short of saying the accusations were false.
A quiet revolution in solar
Too often we talk about cost per watt when discussing solar-module prices. We should really be talking about levelized cost of energy (LCOE), but there are so many variables, including efficiency, land costs, tracking, solar intensity, and so on, that it's easier to just generalize with cost per watt.
But SunPower may be making that comparison harder with a new concentrating solar module that was introduced this week. The SunPower C7 Tracker looks like a rack of mirrors, but what it's doing is concentrating the Sun's power seven times onto each solar cell. Since SunPower has the most efficient cells in the world, this allows each cell to create much more electricity than it would in a normal flat panel.
SunPower claims that the C7 Tracker will create a 20% lower LCOE than competing technologies, so this could be a big step forward for the industry.
SunPower also announced a new AC solar panel that has an integrated microinverter. Canadian Solar (Nasdaq: CSIQ) announced a similar product last week, and with the rooftop market becoming key, I expect similar announcements to continue. An AC module makes installation easier and should help lower LCOE for homeowners.
It's continued innovation like this that will help drive the industry forward.
Earnings-season preview
Solar manufacturers will start reporting earnings soon, and investors will be watching closely to see what they report and say in conference calls.
In recent weeks I've pointed to falling polysilicon prices as a bad sign for LDK Solar (NYSE: LDK) and a glut of module supply as bad news for suppliers and low-tier manufacturers like JA Solar (Nasdaq: JASO).
But their weakness may provide opportunities for Suntech Power (NYSE: STP), SunPower, and Trina Solar (NYSE: TSL), which can leverage low polysilicon prices to lower manufacturing costs.
I also think major solar-plant development units at First Solar and SunPower will help insulate them from the low prices Chinese manufacturers are dumping product at right now. They will be able to shift modules to their own projects and avoid the letdown low-level suppliers are likely to see.
All of that said, it's likely to be a rough quarter for most manufacturers.
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