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

German Solar Data Debate: Oktoberfest or Famine?

(Solar stock, German solar demand story, updated for German solar industry data)

NEW YORK ( TheStreet) -- The latest data from Germany's solar installations database recorded 340.5 megawatts of solar installs in October, a decline of 151MW from the September level of 492MW -- which itself was seen as weak -- and a steep decline from the record month of June.

Solar bears immediately jumped on the latest data as a sign that doom is, as usual, descending on the solar sector, and Germany will fall off so quickly and steeply that prices will crater in solar in the first quarter.

Maybe, but then, again, there's more than one way to skin a German solar database.

While the German October data on solar installations is notable for its weakness, it doesn't necessarily follow that it spells doom for solar.

Doom is certainly one, but only one, possible read-through of the 340.5 MW installed in Germany in October.

So let's start with the negative: If German demand is falling off faster than expected, then first-quarter numbers -- and first-quarter guidance given with fourth quarter earnings in the February to March period -- could be anemic.

If there was a negative read-through from the German October data, it wasn't apparent in solar trading on Monday, though, when all solar stocks followed the general market trend higher. Solar trading was mixed on Tuesday morning at the opening bell, but didn't show the kind of trading pattern that resembles fear and trembling from investors.

First Solar (FSLR - Get Report) and Trina Solar (TSL - Get Report), the two leading low-cost module players, were down in trading on Tuesday. Trina was the biggest loser in solar, down 3%, though trading was average. JA Solar (JASO - Get Report), arguably in the position of being squeezed well ahead of the low-cost module makers, if cell pricing goes over a cliff in a hurry -- and cell pricing has been falling of late -- was up on Tuesday morning. Solar inverter company Power-One (PWER), which has a huge presence in Germany and has been at the forefront of bearish trading about oversupply in 2011 and a slowdown in Europe, was up by more than 4% on Tuesday morning.

It can't be denied that 340MW is pretty light for October, but it's not a stretch to make the argument that this is exactly what the mid-year 2010 feed-in tariff cuts were supposed to accomplish in Germany. If the feed-in tariff cuts have worked to slow the growth in Germany's solar market, the risk of major feed-in tariff cuts, or a hard cap on solar in 2011, may have to be taken down a notch on the doom and gloom scale ahead of 2011 political debate in Germany.
1 of 3

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
PWER $0.00 0.00%
FSLR $52.85 0.00%
JASO $8.40 0.00%
TSL $9.01 0.00%
AAPL $95.18 0.00%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs