Which,Why and If of Buying Solar Stocks in 2012 ?

Solar Energy Stocks in 2011 had a very rough year with the 2 solar ETFs falling by more than 50% as the industry went into massive oversupply leading to crashing solar panel prices,revenue,profits,margins and everything else that you could think of .  Many of the industry stalwarts that had been around since the inception of the solar industry like Solon, Evergreen Solar bit the dust. Even the much hyped solar startups like Solyndra is bankrupt while others like Miasole,Nanosolar will share the same fate soon. Even now big companies like LDK and Sunpower are only running because of the government or parent company largess. The carnage would have been much greater if free market operated in the global solar industry . Instead the solar industry is a mish mash of free markets, government subsidies , feed in tariffs , irrational support etc. This makes investing in the industry really challenging even though the industry has grown by an astounding 200% in the last 2 years in terms of volume even though prices have come down by around 70%.

While below is a list of all the solar stocks ,most are dead investments as few solar companies will see 2013 given that the oversupply of polysilicon will stay here till 2012 as more and more companies get weeded out.

So what are the criteria for staying alive in 2012

a) Government Support in Some Form – Most of the Tier 1 Chinese Solar Companies will fall into this bracket. However given that there are so many you would have to look at the biggest like Suntech,  LDK, Yingli for survival in any case. LDK is a BANKRUPT COMPANY ,the only reason it continue to produce a solar panel is because of the Chinese government support

b) Low Cost – Though seems like an obvious idea, there are still companies existing which have high costs like Q-Cells, REC. You just can’t invest in them given that even low cost is a necessary though not sufficient condition to survive

c) Branding – Very necessary to get financing for solar projects as without a brand you are not bankable and will have to sell at a 10% discount in a market which is already selling at below cost

d) Efficiency and R&D Dollars – If you sell a low efficiency multicrystalline solar panel ,then you are toast given that the market is now only looking at higher efficiency stuff given that choice that buyers have. You also need to spend sufficient R&D dollars to get ahead of the competition in reducing costs and increasing efficiency. Smaller solar companies are at a disadvantage here.

f) Low Debt – Not Necessary if you are LDK and have a Sugar Daddy like the Chinese Development Bank but very important for every other solar company.Trina Solar shines in this respect ,Suntech does not.

I have only given hints and conditions of which solar stocks to buy in 2012 .For those who are saying this industry is not a good investment are wrong because a time will come when most of the weaker players are out and the winners will take all . Some companies which should see through these times without question are GCL Poly,Sunpower .What about the rest? Readers are invited to answer in the comments

SOLAR STOCKS BY SUPPLY CHAIN

Solar Polysilicon Stocks

1. Hemlock (Private Company , JV between Dow and Shin-Etsu,one of the biggest polysilicon producers based in USA)
2. Wacker ( WCH.DE) ( The company is the biggest European producer of polysilicon )
3. OCI Chemicals (0100600.KS) ( This company is targetting to become the global No.1 producer of polysilicon,based in South Korea)
4.  Tokuyama  This Japanese producer has been in the game for long but has been the slowest in expanding capacity
5. Daqo New Energy (DQ) (Small poly producer based in China)
6. Hoku Corporation (HOKU) ( Small poly producer based in USA)
7. Timminco (TIMNF.PK) (Canadian company tried to make it big by Metallurgical Silicon,now a penny stock)

Solar  Wafers Stocks

1. GCL Poly (3800.HK)( The biggest solar wafer producer in the world,trades in Hong Kong,makes polysilicon also)
2. LDK Solar (LDK) ( The second biggest wafer producer,now a major solar panel seller as well,makes polysilicon also)
3. Renesola (SOL) (One of the cheapest solar wafer manufacturers,makes polysilicon also)
4. Renewable Energy Corporation (REC.OL)(Norwegian company producers poly,cells and modules in Singapore)
5. Comtec Solar (0712.HK) ( A Small Wafer Producer in China which makes mostly monocrsytalline wafers)
6. MEMC Electronics ( WFR) ( Company makes semiconductor wafers and is one the biggest US Solar EPC/Integrators)
7. Woongjin Conway (016880.KS)( South Korean Wafer Producer in which Sunpower has a stake)
8. Green Energy Technology (3519.TW) – This Taiwanese producer of solar wafers has left other domestic competitors behind in capacity increase
9.  Sino American Silicon (SAS) is one of the oldest wafer producers in Taiwan and supplies to both semiconductor and solar industries)
10. Wafer Works ( 6182.TWO) ( Taiwanese small producer )
11. Danen Technolog (3686.TW)( New small producer of solar wafers)
12. Nexolon  The company is based out of South Korea and is closely associated with the polysilicon giant OCI Chemcials
13. SUMCO( Japanese producer of semiconductor wafers,produces some solar wafers as well)
14. PV Cyrstalox Solar (OVCS.L)( Small German producer of solar wafers,survival in question)

Solar Cells Stocks

1. JA Solar (JASO) ( The Biggest Solar Cell Producer in the World)
2. Gintech (3514.TW) ( Biggest Solar Cell Supplier in Taiwan)
3. Motech (6244.TW) ( Solar Cell Supplier in Taiwan with wafer and poly production as well)
4. E-Ton (3452.TW) ( Survival is in question)
5. Q-Cells (QCE.DE) The largest solar producer of cells in 2008 faced a horrendous 2009 running losses of as high as Euro 1 billion)
6. Neo Solar (3576.TW)(Has been one of the fastest growing solar companies)
7. Del Solar  ( Small Solar Cell Supplier)
8. IndoSolar ( Small Solar Cell Supplier in India)
9. Emcore (EMKR) ( Small Specialist suppliers of High Efficiency Multijunction Cells)

Solar Panels Stocks

1. Suntech (STP) ( The biggest Chinese solar panel producer in the world)
2. Trina Solar (TSL) ( The most valued Chinese solar panel supplier)
3. Yingli Green Energy (YGE) ( Top 3 Chinese solar panel supplier)
4. Jinko Solar (JKS)
5. Canadian Solar (CSIQ) (Despite Canadian in the name is one of the biggest Chinese solar panel suppliers)
6. Sunpower Corporation (SPWRA)( Makes the Most Efficiency Solar Panels,bought by French Giant Total)
7. Hanwha Solar One (HSOL) ( Earlier known as Solarfun,bought by South Korean Conglomerate Hanwha)
8. Sharp ( Biggest Japanese Solar Compan)
9. Sanyo Panasonic( Sanyo plans to invest more than  70% of its total investment over the next  3 years in its renewable energy and energy storage segment)
10. Kyocera(Kyocera is Japan’s second largest solar panel producing company)
11. Mitsubishi( Mistubishi is another old time Japanese solar company which has a low profile solar module and system business)
12. LG (It is selling solar modules in the South Korean and European markets and has 240 MW capacity)
13. Samsung ( The company makes silicon solar cells and panels,will start making poly with MEMC)
14. Hyundai ( The first South Korean company to move int solar panel production)
15. Solarworld (SWV.DE)– Solarworld is the Biggest German producer of solar panels,the company is one of the few to still have operations in Europe and USA)
16. Bosch (Automotive company,made expensive acquisitions,now moving production to Malaysia)
17. Shanghai Chaori Solar Energy (Listed in China,integrated producer of solar panels)
18.  AUO ( AUO has a  JV with SunPower’s to build 1.4 gigawatt third solar cell fabrication facility  in Malaysia)
19. China Sunenergy(CSUN) (A Small China Solar Energy Cell and Panel Supplier)
20. Arise Technologies (Canadian small suppliers of solar panels)
21. BP (Outsources production of solar panels,sells under brandname )

Solar Integrators/Installers Stocks

1. Toshiba ( Has  decided to become a big player in  the Solar EPC business
   
2.  Mitsui (Mitsui,the giant Japanese tradings house bought Sunwize in 2006 to enter the solar system market in the US)
3. Akeena/Westinghouse Solar (WEST) ( The first US Solar Installer to list on the US Stock Exchange)
4.  Real Goods Solar (RSOL)- The second US Solar Installer to list on the Stock exchange
5. Phoenix Solar (PS4.DE)(German installer with operations around the world)
6. Conergy(Once the biggest solar installations company,now fallen on hard times)
7. Juwi Solar (Another German installers,looking to expand internationally)
8. Kerself (KRS.ME)(Small Italian Installer)
9. Solaria Energie(Spanish installer )
10. Solar-Fabrik (SFX.DE)(Small installer,which also makes solar panels and cells)
11. Solon(SOO1.DE)(Another German solar panel and cell maker fallen on hard times)
12. Sunways(SWW.DE)( German company making solar panels,cells and also doing EPC)
13. POSCO (South Korean Steel Giant has started Solar EPC Operations)

Solar Inverters Stocks

1. SMA Solar (S92.DE) The Big Daddy of the Solar Inverter Market with a   40% Marketshare of the Global Market
2. Power-One (PWER)  The US power management company has shown the fastest growth in 2010
3. Schieder Electric (This European Electrical Equipment Giant got into the solar inverter market by buying up Canadian Producer Xantrex.
4. Advanced Energy( AEIS ) which is a US semiconductor company  is also a big manufacturer of solar inverters.
5. Satcon (SATC) (Small USA based solar inverter supplier)
6. Delta Electronics ( Taiwanese company bought Solon solar inverter division)
7. ABB
8. Sputnik Engineering (Swiss maker of solar inverters)

Solar Encapsulants

STRI Holdings ( STRI) ( The biggest suppliers of encapsulants used in solar panels in the world,based in USA)

Solar Material Suppliers

1. 5N PLUS Inc. (VPN.TO) ( Supplier of Cadmium Tellerium which First Solar uses to make Thin Film Solar Panels)
2. Giga Solar ( Taiwane supplier of metallic paste used in Cell Production)

Thin Film Solar Panel Stocks

1. Saint Gobain  ( Sells CIGS panel in JV with Hyundai)
2. TSMC  ( Sells CIGs Panels in association with Stion
3. Solar Frontier – Solar Frontier is a subsidiary of Showa Shell Sekiyu and is listed on the Japanese Stock Exchange
4. Ascent Solar (ASTI)  This US Based Company has a long history of making Thin Film Panels on Flexible Substances
5.  Energy Conversion Devices (ENER) After First Solar,Energy Conversion Devices seemed the mostly likely viable company in Thin Film Technology
6. Honda ( Small CIGs Panel Sellers)
7. General Electric(GE) ( The company is not only a big Solar Developer but also going to sell Cd-Te Panels)
8. Trony Solar (2468.HK)) (Trony Solar is the largest Solar Thin Film Producer in China)
9. Kaneka (Japanese company producing amorphous silicon solar panels)
10. Chint ( Producers Thin Film Solar Panels under Astroenergy Name)

Solar Equipment Stocks

1. GT Advanced Technologies (GTAT) ( US based supplier of polysilicon and wafer equipment to Chinese companies)
2. Applied Materials (AMAT) ( The biggest semicap company is also the No.1 solar equipment seller in the world)
3. Meyer Burger (MBTN.SW) ( Swiss company recently bought Roth &Rau)
4. Centrotherm (CTN.DE) ( One of the top 3 solar equipment sellers based in German)
5. Manz Automation (M5Z.DE)( Another small German company
6. Oerlikon  (Swiss company makes solar equipment for producing amorphous solar thin film panels)