This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Solar Outlook 2011: The German Question

NEW YORK ( TheStreet) -- The amount of noise coming out of Germany about proposed additional solar feed-in tariff cuts is an annual rite of passage -- and period of unrest -- for solar investors. Yet there's been a major change of tone this year in the battle of the future level of installations in the solar sector's leading market.

It's a well known fact that, as was the case last year, Germany is again considering additional feed-in tariff cuts in 2011. Also on the table is a potential hard cap on solar installations, though some solar experts, including Jefferies analyst Jesse Pichel, have stated categorically that a cap in Germany in 2011 won't occur.

Recent developments point to a hard cap being unlikely to occur but not because talk of a cap has turned out to be a "boy who cried wolf" scenario as it has in the past. Rather solar interests are already making big concessions about FIT cuts in 2011, and that's an indication the industry may really be afraid the political powers have the muscle to lower the boom of a hard cap if pressed on the issue.

Reuters reported last week that two key political parties that have always supported solar, the Greens and the Social Democrats (SPD), were willing to support solar FIT cuts next year. These are the parties that originally enacted the legislation to support the birth of the solar industry and the FIT in Germany.

Maybe even more telling, the German solar industry lobby, the BSW, has gone further, saying that it is willing to not just swallow a mid-year FIT cut in 2011, but move up a portion of FIT reductions scheduled for 2012 to 2011.

Carsten Koenig, the head of the BSW, told a German magazine recently that a mid-year FIT reduction of 13% in 2011 could actually be as high as 21%. Koenig's comment to a German periodical called Focus was reprinted this week by Bloomberg.

As Wells Fargo analyst Sam Dubinsky wrote in a note this week to solar investors, "Political support in Germany looks to be waning."
1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
JASO $8.33 -0.48%
TSL $8.86 -2.10%
YGE $3.12 1.63%
AAPL $93.24 -0.41%
FB $117.81 -0.21%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs