Posted on 03/12/2012 4:21:36 AM PDT by Kaslin
Get ready for a new round of green bankruptcies, as Europe trims back subsidies for solar companies and taxpayers lose their appetite for subsidizing green power.
“The mini-bubble resulting from the rush to cash in on solar subsidies in European and U.S. markets is ending, as feed-in tariffs drop in Europe while loan guarantee and tax credit programs tighten up in the U.S.,” says a new report from Bank of America Merrill Lynch according to CNBC.com.
Germany is dialing back subsidies for solar this month by 29 percent with subsequent decreases each month, according to Bloomberg.com.
Rasmussen has recently released a survey of voters that show a diminishing number of voters support subsidizing the production of the Chevy Volt.
Only 29 percent of likely voters agree with Obama’s latest proposal to include a $10,000 subsidy in the federal budget to support the purchase of every electric vehicle.
The survey found that 58 percent oppose the plan, while 13 percent remain undecided.
And make no mistake, without subsidies solar, electric vehicles, wind power and other alternatives remain a chimera.
“Steven Cortes, CNBC contributor and founder of Veracruz Research, also sees solar stocks declining further and wonders about the impact of the recent natural gas boom on the sector.
“’As much as I love sun, I hate the solar space. This is not a real business, it’s a political construct,’” Cortes said on Fast Money Wednesday. “’And they can’t compete with natural gas at these levels.’”
According to the Associated Press the U.S. now has 2.433 trillion cubic feet in storage.
“That figure is 48.3 percent more than the five-year average, the Energy Department said,” reports the AP. “Natural gas fell 3 cents to finish at $2.27 per 1,000 cubic feet in New York. The price has fallen about 27 percent this year and is at the lowest level in a decade.”
Last week Abound Solar announced it would lay off half its workforce despite receiving a $400 million loan guarantee from the Department of Energy last year. The rating agency Fitch’s hit Abound over failures to meet stated goals, old technology, calling the company “highly speculative” according to ABCNews.
Reports ABC:
It remains way too early to determine whether Abound is poised to follow the trajectory of the best-known solar manufacturer to receive a sizeable government loan -- Solyndra, the California firm that filed for bankruptcy in September after having burned through the bulk of its $535 million federal loan.
Perhaps.
However, there is an old saying in the market that the tape doesn’t lie.
And the tape on solar companies is horrendous.
In the second quarter of 2008 First Solar (Symbol: FSLR) briefly touched $300 per share. Today it trades at $27.49. That equals losses of about $24 billion in market capitalization in just four years.
In April of last year Trina Solar LTD (Symbol: TSL) was trading just under $30 and is now trading at about $7.31. Earnings estimates have gone in the last few months from Trina losing about 17 cents per share for 2012 to losing about 63 cents per share.
The Guggenheim Solar ETF (Symbol: TAN) has also moved down from around $300 per share in mid 2008, until it trades now at $27.02.
And the fundamentals aren’t getting better for solar soon, because solar can’t compete with coal-fired or nuclear generated electric.
“Fewer solar panels will be installed this year,” reports Bloomberg “as the first drop in more than a decade worsens a glut of the unsold devices that’s already slashed margins at the top five manufacturers, an analyst survey showed... Without government incentives, even record low prices for solar panels may not be cheap enough to encourage solar farm developers and homeowners to install them in the volumes needed to work through the glut, said Rozwadowski, the most pessimistic analyst in the survey. He expects installations to drop to 20.7 gigawatts.”
It’s important to note that the poor performance of the solar industry came at a time when government financial support has been at an all-time high world-wide. It only goes to show that politics and public policy are poor substitutes for free market economics.
Expect the solar industry to continue to crash and burn as government money continues to dry up along with public support.
Paraphrasing Ann Coulter, “Liberals ridicule the idea of tapping our own energy resources as pie in the sky dreaming, but that 747 that runs on grass clippings? That’s money in the bank.”
HA-HA, solar can’t replace oil. Rising Oil prices don’t help this industry. The greenies thought we would all buy Volts and power them with solar panels.
Solar works great for heating outdoor pools in NV. The water is pumped up across the roof of the house where it is 105 degrees and back down again into the pool.
Big-solar-flare alert.
Even when solar power is said to be competitive with other power sources, they’re counting on free land. And solar requires a lot of land compared to anything fossil fuel or nuclear related.
Powering the pump can’t be cheap.
but not before we plow a few hundred billion more into it to keep it from going under before the election
Knowing liberals, in order to keep the blades turning when there is no wind, they would power it with coal.
And it will be a courageous decision by the EPA.
Yet another GREAT article to file under keyword “FailedGreen” (companies, technologies, policies). There are getting to be a really good crop of articles that have been tagged using that keyword. I have been going back and adding that keyword when I notice past articles that merit it, too.
I encourage others to use this keyword, which I have included on my home page for reference.
The problem with solar and wind energy plans is that the politicians want to REPLACE current energy generation sources instead of AUGMENTING them.
This would give solar and wind technology time to mature so that someday, maybe, we could eliminate burning of coal and maybe even nuclear plants.
Those kind of plans are more ‘long term’ and benefit the general public instead of DNC donating corporations, which is why they aren’t happening now.
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