Marketshare
March 29, 2011
Cheap Solar Panels are widely available with the entry of a multitude of Korean,Chinese and Taiwanese companies.Most of these solar panel manufacturers are fighting on price and have decent quality.With little to differentiate between solar panels made by different firms,cheapness has become the main selling point for these solar panels.Cheap Solar Panels can be bought by an informed customers as expensive Western and Japanese brands still hold a large marketshare.But buying these brands might not make sense economically or environmentally.You can easily avoid buying solar panels from BP Solar because they outsource manufacturing of their solar panels to cheaper locations.It is common sense to buy cheaper solar panels from the companies located in those low cost locations.
March 28, 2011
Free Solar Panels don't exist just as Free iPads don't exist.Some websites and companies advertize free solar power or free solar panels based on government subsidies.Note even these free solar power offers are not completely free as they have a payback periods depending on how much government subsidies are given.Nobody is going to give you a free solar panel or a free iPad without a catch.
March 28, 2011
British Petroleum (BP) the multi billion dollar Oil and Gas Conglomerate is a strange player in the Renewable Energy Sector of Solar Energy.BP was a dominant company amongst the top 10 global manufacturers of solar panels till a few years ago.However the lack of interest on the part of management,low investment,lack of R&D has made it a bit player in the fast growing solar panel market.Companies which did not exist till a few years ago have outpaced BP to become top solar panel producers.However BP Solar Panels continue to sell in a number of market because of existing sales relationships and brand name.However it is only uneducated and uninformed consumers who are buying BP Solar Panels in my opinion.BP Solar Panels should be avoided both from an economic point of view and from the environment perspective.
March 19, 2011
Chinese companies have risen from virtually nothing 5 years ago to become Top 5 Global Wind Energy Players.The Chinese companies have seen massive growth on the back of a strongly growing domestic market.China which now accounts of 50% of the world Wind Turbine market in 2010 is expected to see continued strong growth with the Chinese government setting a target of more than 100 GW by 2015.The growth of the Chinese Turbine Producers has been mainly due to the domestic content requirement set by the Chinese government earlier.The government owned utilities also favor the domestic companies leading to their astounding growth.
March 19, 2011
While Chinese pure play solar panels companies have already captured a majority of the global solar module market,the entry of newer Chinese players into the solar energy market refused to stop.China's 5 largest state owned utilities have already made their presence felt in the Chinese domestic solar installation market by bidding extremely low to win projects under the Chinese Solar Subsidy program.Automotive companies like BYD have also announced a big investment into solar panel manufacturing while Hanlong and Bluestar Groups have decided to invest in the CPV and Polysilicon sectors respectively.
March 19, 2011
India's Economy is being hampered in its growth trajectory by lack of infrastructure which is leading to supply side problems.India suffers woefully from a lack of roads,electricity,ports etc. and almost a trillion dollars is going to be spent in the next few years as demand outstrips supply.India's Machinery and Capital Goods Industry is set to capitalize on this strong growth and is already seeing massive orders which are 2-3 years worth of their annual revenue.While the stock valuations of the capital goods equipment manufacturers has come down a bit from the heavy days of 2008,they are still quite high reflecting the strong growth potential.India's Engineering Industry is also composed of a number of smaller manufacturers that export light engineering equipment worth several billion dollars mostly to developing countries.India's Machinery Sector is composed of a mix of government owned and private companies as well as the giant capital goods MCN conglomerates like Areva and others.Here is a list of the major Indian equipment manufacturers.
March 19, 2011
German's Solar Energy Market is the biggest in the world by a fair margin.Germany installed almost 6 gigawatts of solar panels in 2010 taking the total installed capacity to almost 16 GW which is 40% of the world's total installed solar capacity.Note Germany's Photovoltaic Solar Electricity now forms almost 10-15% of the total electricity production in the country at peak time.Note Germany's solar industry got a renewed boost when 7 old nuclear plants were shutdown following Japan's Fukushima Nuclear Disaster recently.Previously Germany had decided to extend the operating life of its Nuclear Plants despite stiff opposition.Germany Solar Subsidy which is framed under the Renewable Energy EEG law has made Germany one of the world's leaders in Wind,Solar and Biomass Energy.Germany's Manufacturing Industry has benefited from the strong domestic market with many of the world's top solar panel companies located there.Solar equipment,inverters and cell companies are also present in large numbers.Recently Germany amended its Feed in Tariff Law to slowdown the exponential growth in solar panel installations.This is over and above the regular reduction in solar subsidies done each year.
March 16, 2011
PTC India Financial Services has substantial advantages of growth,a good business model in India's booming Energy Sector.However the valuation of the company has been kept too high for essentially what is a financial intermediary.The growth of the company has been compensated by the high valuation making it not such a good buy especially in the context of the current stock market and economic conditions.It might be better to look at cheaper alternatives in the Indian Infra Sector.
March 15, 2011
The Taiwanese Solar Industry has become the 2nd largest in the world following in the footsteps of China.Taiwanese Solar Industry has a longer history than the Chinese with Solar Cell Makers Motech and E-Ton establishing themselves globally way back in 2006.However the steep fall in solar panel prices following the Lehman crisis had led to losses for these companies as the Chinese companies surged ahead using their low cost manufacturing.The crisis also led to the emergence of newer Taiwanese companies like Gintech,Neo Solar which are growing at extremely fast rates.Note Taiwan is a hub of semiconductor manufacturing with leading companies like TSMC,AUO,UMC,HTC etc.Solar Industry uses many of the same technologies,raw materials and techniques common to semiconductor and Display Panels Production giving Taiwanese firms a natural advantage.Taiwan has been predominantly present in the crystalline Solar Cell part of the supply chain and lacks a big manufacturer of polysilicon ( though a facility has been started).The lack of vertical integration has also made the costs of the Taiwanese industry higher.The entry of large companies like AUO,TSMC has further increased the competition in the Taiwanese market.Note Taiwan's government has also promoted the use of solar energy in the country through the use of a Feed in Tariff program.
March 13, 2011
Tidal Waver Energy is still an immature technology with most of the plants built around the world being pilot/demonstration ones.However Tidal Wave Energy holds big potential though it is still a decade away from reaching large commercial scale just like Algae based Biofuel and other forms of Green Technology.Tidal Wave Energy essentially works by converting the energy generated by tidal waves into electricity energy.Tidal Generators are used to convert energy from tidal energy into a more useful form.Here are the following ways Tidal Generators are involved in producing Tidal Power.
March 10, 2011
Interest in India's Renewable Sector is growing by the day with massive potential in Wind,Solar,Biomass and Nuclear Energy.Renewable Energy in India is going to more than quadruple in capacity over the next decade providing amply growth and profit opportunities.Foreign and domestic makers are already making a beeline to the Indian market to get a first mover advantage.Here are some of the main news in the Green Industry Space in India
March 8, 2011
Solar Energy in Japan has a long future dating back to 1994 when the government introduced capital subsidies to boost solar energy installations on rooftops.Till 2004,Japan was the largest solar market in the world after which it was overtaken by Germany.After 2004,the growth in the solar industry tapered off as the government reduced the subsidies for solar panels to almost zero.The huge domestic market gave rise to Japanese companies like Sharp,Mitsubishi,Kyocera,Panasonic-Sanyo become top solar panel producers in the world.However the low cost Chinese solar module producers have pushed back most of the Japanese companies.Since the last year,the Japanese government has again started giving generous solar subsidies and feed in tariff to boost the renewable energy production in the country which remains far off targets.This has led Japan to become the top non-European market after USA and the growth seems set to continue in the future as well.Japan has relatively low installations costs and is much nearer to grid parity.Also lack of wind energy makes solar energy more attractive as a renewable energy choice.While large scale solar installations in Japan are almsot absent,there remain large numbers of rooftop solar installations.
March 8, 2011
India's GDP has been growing at a rapid clip over the past decade and is set to grow at even a faster pace in the coming decade.Financial services penetration of the Indian economy is quite low compared to even other developing economies.With majority of the Indian population mired in poverty,access to banks and financial companies is quite hard as people lack knowledge and education.India's banks have grown at a rapid pace over the past 2 decades after the financial liberalization.However this growth has still lacked in meeting the massive demand in the need of financial intermediation.This has led to the growth on non-banking financing companies (NBFCs) and microfinance companies.With the opening of the insurance sector,financial companies in India are set to enter a new growth phase.Major banks in India are either state owned or previous government owned institutions which have been fully privatized like ICICI and HDFC Bank.Both the state owned banks and the private banks have managed to grow without throwing the whole system in a crisis like what has happened in the recent past in Europe and USA and in China in the 1990s.Here is a list of the 10 Major Banks in India
March 7, 2011
Lovable Lingerie is an innerwear textile company that is coming out with a $20 million IPO.Unlike other totally junk issues which are totally hands of market operators,this one seems to have decent fundamentals and the valuation is not too expensive either.The company has managed to sell 6% pre-IPO to Sequioa Capital which is one of the blue blood PE firms in the country.However this should not be an endorsement given that a number of their investments have bombed in the recent mid cap and small cap carnage.Corporate governance and management issues in small companies in India is totally out of control so investing just based on pure fundamentals does not help.Also a number of other companies in the same sector in textiles remain at attractive valuations.That said the company does have good differentiation as it leverages on the fast growing Indian consumer growth story.The company sells Lingerie though top retail outlets like Lifestyle,Shopper's Stop in top Indian metros and has good brand recall.Here are the positives and negatives of the company based on its DRHP.
March 4, 2011
Solar Inverters are a crucial component of the overall solar system accounting for around 10% of the overall costs.Solar inverters connect the solar panels to the grid converting the DC to AC which is used by the grid.Solar inverters have become highly sophisticated with features like optimization and monitoring etc.The efficiency of solar inverters are a major factor in their purchase as well as the quality and reliability.Inverters comes in various sizes and can be as large as 1 MW for utility applications.Unlike Solar Panels,the Solar Inverter Market is much less crowded though competition is growing as the size of the market increases rapidly.The ~$2.1 billion market in 2009 with 7 GW of installations has increased by more than 130% to around $5 billion in 2010 as the solar panel demand globally increased to around 17 GW.Note Solar Inverter Companies have done much better as competition is much lower and the annual price declines in solar inverters has been much lower at around 10% compared to the 50% decline in solar panel in the last 2-3 years.Here is a list of the major solar power inverter companies
March 1, 2011
Solar Wafer Companies are mainly concentrated in Asia specifically China and Taiwan.Cheap labour,lower land and capital costs as well as presence of major customers has made China the No.1 Solar Wafer Producer in the world.Despite most of the polysilicon being produced in Europe and USA,China leads the way in wafer production.Note semiconductor wafers in contrast are mainly produced in the developed countries like Japan,USA and Germany.The structural forces of the crystalline silicon industry is forcing vertical integration with cell producers making wafers and wafer production companies making cells.However there are a few companies which predominantly concentrate on supply solar wafers to solar cell manufacturers.Here is the list of the main solar wafer producers which have shown stunning growth in the last few years.
February 28, 2011
Crystalline Solar Cell Suppliers are fast disappearing due to the changing dynamics of the global c-Si Solar Panel Industry.With vertical integration becoming imperative as margins and prices get squeezed,independent solar cell suppliers are having a tough time.Increasing raw material costs in terms of higher polysilicon and solar wafer prices and competition from numerous players has decreased the number of pure play solar cell suppliers.However a few of the top solar cell producers continue to grow and flourish though they are also entering into other segment of the PV solar supply chain.Most of the independent solar cell suppliers are from Taiwan and some from China.European solar cell producers have mostly disappeared due to the high cost base of the European factories.Note this list is mostly composed of solar cell producers who don't have big module making operations.You can find a list of the top solar energy companies most of which make solar cells as well.
February 28, 2011
South Korea is one of the biggest shipbuilders with major companies like Daewoo,Hyundai Heavy and Samsung.However its being beaten down by the low cost Chinese companies which are using cheaper capital and lower labor costs to press their advantage.South Korean Shipbuilders have been trying to diversify into offshore wind energy in order to safeguard their revenues.However they face tough competition in this renewable energy sector as well from incumbent wind turbine compaeis as well as Chinese WTG companies like Sinovel,Goldwind and others.Now the South Korean government is helping them with a 300 billion won research fund.This fund will be used to do R&D into building of "Green Ships" which are becoming the new growth segment.
February 18, 2011
Solar Energy is the fastest growing renewable energy source in the world and has shown tremendous growth in the last 2-3 years.This has been driven by a more than 50% decline in Solar PV costs which continues to decline further.With further increase in energy prices,Solar Power is becoming closer and closer to retail electricity price.Not only is the price declining,solar power is clean energy a most valuable feature in these days of accelerating climate change.Solar Energy has already reached grid parity in places like Italy and Hawaii and will do so in more places in the coming 2-3 years.The industry is a dynamic one and the list of top solar companies can change quickly.Rapid Technology Change and Fast Declining Costs have pushed out most of the Top 10 companies of 5 years ago and brought in new ones mainly Chinese.Here is a list of the Top Solar Panel Producers in the World.
February 7, 2011
The European Solar Companies have found things going tough in 2009 as the solar market changed radically with the Lehman crisis.As the prices of the raw material Polysilicon crashed and Chinese competition increased,these companies started bleeding red ink in a prodigious manner.The high cost structure of these companies with factories in Europe stood naked against the competition.With high debt loads,there was a high change that these companies would go bankrupt.Most of them like Q-Cells,REC started to move manufacturing to Asia while Solarworld moved to Europe.Other smaller companies muddled through.However a spectacular 2010 growth in world solar demand has brought new life into these companies.With capacity constrained,even their higher prices could be absorbed by solar installers.These companies have reported much better 2010 results with Solarworld and REC leading the way.
February 7, 2011
The Chinese Penetrate the US Solar Utility Market – exclusive playground of First Solar and Sunpower
The US Solar Utility Market has been the preserve of the 2 largest US Solar Module Players Sunpower and First Solar.While other Solar Panel Makers have won small deals,these 2 companies have dominated the US Utility Market so far.Sunpower has been very successful in the commercial,municipal and utility segments winning a huge number of deals even as its residential dominance evaporated.The bigger Chinese solar producers like Trina,Yingli,Suntech had already taken over the residential market in California with their much cheaper prices.Now even the larger utility market is under threat from the low cost companies from Asia.Note upstream producers like LDK and GCL Poly are also targeting the system development market in US through acquisitions and alliances.The 250 MW Sempra Generation solar plant being built in Arizona will source Suntech modules and will be completed by 2013.This is a huge order win by Suntech which is the largest module producer in 2010 and could see other Chinese producers using this as a template to push out Sunpower and First Solar.
January 13, 2011
USA recently signed a Military Law which obliges the US Defense Forces to buy Solar Panels which are made in the USA.This "Buy American" proposal directly contradicts US actions and policy which advocates free trade in Green Energy.The US Steelworkers Trade Union recently filed a petition with the US Administration against subsidies being given to the Green Industry by China.US government officials also spoke against the "domestic content" requirements of the Indian Solar Subsidy Policy JNNSM.However when it comes to their own solar panel procurement,the US government has foolishly forced its military forces to buy USA made panels.Not that this will help in boosting the US industry too much,as a number of foreign solar panel producers like Solarworld,Suntech already have module making factories in the United States.Also it remains doubtful about how many solar panels the US Military will buy in the coming years.It will remain a fraction of the global solar demand.Instead of supporting US Solar companies like Evergreen Solar,Energy Conversion Devices which are fighting to survive,the administration has given billion dollar loans to a Spanish Solar Thermal Producer.
January 12, 2011
Sunpower has been the dog of the solar market in 2010 as competitive pressures from low cost Chinese companies have made investors question the long term sustainability of the company.But Sunpower has managed to survive with some smart deals like the manufacturing JV with AUO and focusing on the solar project development.Sunpower makes the world's most efficient solar crystalline panels but comes at a much higher cost.This has led to erosion of its marketshare as cutthroat Asian companies have ruthlessly cuts prices and costs of solar panels.Sunpower has lost its dominant position in the US residential market with major Chinese companies like Trina,Suntech,Yingli and Canadian Solar winning large chunks.However Sunpower management has been a trier all along with its management constantly looking for ways to survive and proper .It has also started using less efficient solar panels for its projects as part of its strategy to compete.
December 21, 2010
Dongfang Electric Corporation,China's largest power equipment producer has bagged major contracts in India.Dongfang Electric is the 3rd biggest Wind Turbine Producer in China as well and has managed to bag a 276 MW $203 billion WTG supply contract with Abhijeet Group .This is the first major contract wind in the Wind Equipment Sector for a Chinese company and could be start of a major trend.Dongfang has also won a small a massive $2.5 billion contract to supply 6. GW of super critical coal equipment to KSK Energy. Note Chinese companies have become the low cost leaders in the Wind Equipment Industry and sell much below Western competitors.At almost $700,000/MW,the Turbine order is a steal for the Abhijeet Group and cannot be matched by Indian or Western players.Leading WTG companies from the West like Vestas and Gamesa are reeling from Chinese competition and slowdown in Western markets.Suzlon too has been affected as Korean shipbuilders and Chinese wind producers have become major players.Using domestic content requirements and technology transfer,Chinese companies have become top global producers from zero presence just 5 years ago.
December 6, 2010
Here Honda which is a Joint Venture between Japanese Automajor Honda and the Hero Group of India is restructuring such that Honda will exit the JV.Note Hero Honda has been immensely successful over the last 2 years riding a vehicle boom in India.While other autos stocks like Mahindra,Tata Motors have risen a lot,Hero Honda has been the star with its leading marketshare in the motorcycle market of India.The terms of the deal in which Honda will sell its 26% stake in the company to the Hero Group is very damaging to minority investors in the JV.According to the deal proposed by the Hero Group and accepted in principle by Honda,the Hero Group will get the 26% at a sharp discount from its market price and in return Honda will get much higher royalties for the next 3 years.This is an open and blatant looting of the minority investors.Note the beneficiaries of this deal will be the promoters at the expense of minority investors since they will have to bear the burden of much higher royalties in the future.
December 3, 2010
Spain is having difficulties with its fiscal deficit and finding it hard to sustain subsidies for Renewable Energy.The Markets in the West have also saturated themselves in terms of growth rates.Though low cost South Korean and Chinese Wind Turbine Producers have not penetrated the Western Markets yet,they could do so in the future.Gamesa which is a Top 5 Wind Energy Company has faced a turbulent year with the owners selling stakes and the share price taking a huge dive.Gamesa is one of the worst performing Wind Energy Stocks in 2010.Gamesa is looking to restructure its operations and concentrating on the offshore wind market by focusing on higher megawatt turbines.Gamesa is leading a massive Spanish Research Effort to develop a colossal 15 MW Turbine meant for the fast growing offshore wind sector.But this is a long term plan with 2020 set as the target for the complete development of this new Turbine.Meanwhile Gamesa has become the target of takeover speculation by one of the bigger Chinese Wind Turbine players like Sinovel,Goldwind etc.Gamesa has seen its revenue fall by 28% and profits by 71% with Operating Margins of 4-5%.Things don't look too good for 2011 either though Orders have started ticking up.
December 1, 2010
Chinese Solar Companies have increased their global marketshare of the Solar Panel to around 60% from virtually 0% in 2006.The Solar Panel Dominance of the Chinese has been growing since last year as Europeans and Japanese have found no answer to their cheap solar panels.Q-Cells,Solarworld and other European companies have been reduced to bit players in the Solar Market as the low cost Asians have ramped up their capacity and shipments in 2009 and 2010.The only reason that they continue to survive is the more than 100% growth in the Solar Demand in 2010.With oversupply expected in 2011,Europeans will be virtually wiped out from the world solar panel market due to their high cost uncompetitive business models.European solar factories are closing as the remaining companeis shift their production to low cost Malaysia and Singapore.
November 25, 2010
Boeing,the US Aircraft and Military Equipment Supplier had decided to sell its high efficiency solar cells in 2011.Note Boeing Subsidiary had created a record a couple of years ago with a 39.2% multi junction solar cell.These cells are primarily used in spacecraft where low space requirements require the use of high efficiency cells without major cost considerations.Spectrolab has continued to improve on the efficiency of the cells reaching 41.6% in a NREL Lab Test.Boeing has claimed a 60% marketshare of the space solar cell market and hopes to replicate that success on Earth as well.Boeing had earlier said that it would set up a 300 MW capacity by 2010 and market solar cells to CPV companies such as SolFocus.Will Boeing be Successful at Selling High Efficiency Spectrolab Germanium Solar Cells
November 25, 2010
One97 a Private Equity Backed Mobile Value Added Service (VAS) Company is raising Rs 120 crore ( $25 million) from the Stock Market in an IPO.The Company operates in India's Telecom Sector which is the fastest growing in terms of subscribers and represents a good growth opportunity as 3G services starts to roll out.
The Company has not indicated the pricing of shares as of now ,only that it wants to raise Rs 120 crore.Note the VAS Category is seeing increasing competition with a number of new entrants.One97 has diversified into a combined VAS player cum Technology Investor makings its valuation difficult.Note the VAS sector is no longer a unique or fancied one as OnMobile has already listed sometime ago and its valuation has decreased dramatically since then despite improved profits.I would sit out on this one due to the complicated nature of the business,slowing growth and valuation difficulties.A higher risk investor probably might want to buy this one.