This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

China to Introduce Solar FIT: Reports

NEW YORK ( TheStreet) -- A surge in Chinese solar market demand could give a jolt to inert solar stocks.

Two new reports suggests that a national feed-in tariff, long delayed in China, is finally set to debut in the second half of 2011.

If the reports are true, and China finally steps up and stimulates domestic solar demand, it will be a welcome change. The emerging giant's primary role in the solar sector has been to dole out capital to Chinese solar companies through state-owned banks, and that's only served to stimulate industry overcapacity.

Yet the details about the Chinese national feed-in tariff system were lacking, and two reports that spurred hopes were contradictory.

Reuters reported that China would soon introduce a national feed-in tariff, though its source was a Chinese state news agency. Goldman Sachs reported a different version of the same story, and a version that filled in some important details.

Goldman Sachs analyst Amy Song wrote that a "temporary" FIT would be introduced only for 2011, and only for projects that had been endorsed by the government prior to July 1, and these projects had to be grid-connected by the end of the year. The FIT rate in China would also be much lower than FITs in Europe based on the Goldman numbers.

Goldman quoted Li Junfeng of the National Development and Reform Committee of China in its report, and the NRDC is a major energy policy maker in China.

If it's only a temporary FIT, then the Chinese plans are no panacea for the solar sector. It would merely make the economics better for projects already approved by the government as opposed to stimulating incremental demand. Notably, Goldman Sachs updated its 2015 and 2020 demand numbers in China based on the reports, not its short-term outlook.

Chinese policymakers made negative comments earlier this year about the European FIT model, so a temporary FIT would make sense in light of the hesitation to embrace the concept.

Some of the most beaten up Chinese solar stocks were up on Friday, too, led by Suntech Power's (STP) gain of nearly 6% on notable trading action of almost twice its daily volume. LDK Solar (LDK) and Yingli Green Energy (YGE - Get Report) were also up by more than 2%. A bounce is not necessarily bullishness, though, for stocks that have seen their market values reduced to near book value this year.

1 of 2

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
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

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
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
PWER $0.00 0.00%
LDK $0.00 0.00%
STP $0.53 0.00%
YGE $1.86 -1.10%
AAPL $125.34 -0.82%

Markets

DOW 17,872.85 -103.46 -0.58%
S&P 500 2,077.58 -8.66 -0.42%
NASDAQ 4,924.0940 -23.3470 -0.47%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs