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Rutgers' Chinese solar panels show clean-energy shift
(Agencies)
Updated: 2010-07-23 15:22
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Some foreign competitors from Germany's Solarworld AG and Q-Cells SE to Marlboro, Massachusetts-based Evergreen Solar Inc. fared worse. Solarworld has lost 29 percent in value, Q-Cells dropped 50 percent and Evergreen plunged 56 percent.
Min Li, a Hong Kong-based energy analyst at Yuanta Securities, said Chinese solar stocks are now attractively priced. He rates Yingli and Suntech as a "buy." Overall, analysts favor Chinese over Western manufacturers.
Fourteen of 27 analysts tracked by Bloomberg recommend buying Yingli, compared with one "sell" rating. For Trina, all 22 analysts following the stock recommend buying it, while Suntech has 11 buy ratings and 8 sell recommendations.
In contrast, three analysts covering Q-cells rate the company a buy compared with 22 a sell. Evergreen has three buy ratings and 7 sell ratings. Solarworld is almost even, with 14 buys and 12 sells.
'Just a Start'
China's dominance in solar panels started in cities that subsidize clean energy. Baoding, a city of 1 million a two-hour's drive south of Beijing, has used subsidies to attract about 200 renewable-energy companies including Yingli, whose panels power 80 percent of the local street lights.
"That's just a start," said Lian Shujun, vice director of the city's renewable initiative.
State-run China Development Bank Corp lent a combined 116 billion yuan ($17 billion) this year to Yingli, Suntech and Trina, while the central government's Golden Sun program subsidizes as much as 70 percent of the cost of 294 solar projects. Beijing plans to install $1 billion of solar panels around the capital to heat water and light offices in 2012.
"China is beginning to think about what options are out there in terms of its new energy policy," said Lu Yeung, a Hong Kong-based China energy analyst at Bank of America Merrill Lynch. "It's not just fossil fuels, but how to make a green economy that is also a growth driver."
'Inevitable Choice'
The government is just getting started pushing solar, said Jason Liu, who quit his job at McKinsey & Co to become a vice president at Yingli last year.
The country is looking to firms like Yingli for renewable energy to reduce dependence on oil imports and coal.
Some European and US companies view China's solar growth as an opportunity. Germany's Q-Cells last year agreed to a manufacturing joint venture with China's LDK Solar Co.
Tempe, Arizona-based First Solar Inc, the world's biggest solar company by market value, has agreed with the government of Ordos, Inner Mongolia, to build a 2-gigawatt plant.
"It's only a matter of time, one or two years," Frank Haugwitz, a Beijing-based renewable energy consultant, said in a telephone interview.