Solar Bubble Burst !!!

On June 23, I wrote that even FSLR rebound but I'm still bearish on First Solar (see). Last night FSLR was down to $270 from $290.

Solar Industry is only speculative growth industry. Many peoples expect that solar technology will be leading energy industry in the future, maybe in the next 10 years. But business is not just discussing of technology prospect. Otherwise, business is generating profit as much as possible from as cheap as possible raw materials. High technology is not always feasible to become a business and it always forces the producer to be more innovative and competitive against its competitors. So, producer must spend more budget to revive its business.

According to Bloomberg, the Spanish newspaper Cinco Dias reported that the Spanish industry ministry is considering cutting the electricity rate paid to photovoltaic installations by as much as 35%.

The story reports that the ministry would set a limit of 300 megawatts of new capacity for the industry for next year, 200 for roof-top installations and the rest for ground equipment. The new tariff would be 33 Euro cents per kilowatt-hour for roof installations and 29 cents for ground panels, down from about 45 cents. (Shah last week had said the proposal could be 33 cents for roof-top installations, and 25 euro cents for ground-mounted.)

Shah contends Spain could afford a more favorable incentive program, especially given its reliance on imported natural gas and given its “attractive solar radiation profile,” but that there is a risk the government could choose a less favorable program. He advises investors to take “a more selective approach toward the sector as increased volatility due to concerns about potential outcomes in Spain beyond September could continue to weight on stocks with high Spain exposure.” He lists Canadian Solar (CSIQ), Suntech (STP), SunPower (SPWR), Solarfun (SOLF) and Yingli Green Energy (YGE) as companies with high Spanish exposure. He notes that companies with lower exposure to Spain include First Solar (FSLR) and Evergreen Solar (ESLR).

I found some bearish signals on Solar Stocks, lets look at the charts below:



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