(French solar tariff story updated for closing prices)
PARIS, France (TheStreet) -- France today announced that it is cutting its solar feed-in tariff for rooftop systems from 55 euro cents to 42 euro cents, a 24% reduction in its solar-incentive system. Solar companies and investors have been in panic mode about an upcoming feed-in tariff cut from Germany, the world's biggest solar market by far, but the French reduction is significant.
Is the French reduction a harbinger of worse to come from Germany? The German environmental minister has been quoted recently as saying an announcement about the feed-in tariff cut could be made within days.
There are some important distinctions to be made between France and Germany's solar markets. First and foremost, France is a blip compared to Germany on the solar power global grid. Germany represents between 50%-60% of the global solar market, while France, even breaking into the Top Ten in 2009, represents a mere fraction of Germany's solar dominance.However, France is a growing solar market, and an important one, so the feed-in tariff reduction is reason for solar companies to pause and reflect on the significance of a 24% reduction. It probably won't keep solar companies from chasing business in France, though. The big solar players like First Solar (FSLR), SunPower (SPWRA) and the Chinese solar gang led by Yingli Green Energy (YGE), Trina Solar (TSL) and Suntech Power Holdings (STP) are all anxious to exploit new feed-in tariff geographies ahead of the German tariff reduction. Solar companies were down by as much as 6% early on Wednesday, but by day-end, the losses had moderated. Solarfun Power (SOLF) and Yingli were down more than 6% at mid-day, but closed on Tuesday down 4%. Trina Solar ended Wednesday down less than a percentage point after also being down close to 5% at mid-day.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV