This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Week in Solar Stocks: Impossible Germany

NEW YORK ( TheStreet) -- I'm pretty sure the rock band Wilco's lead songwriter Jeff Tweedy was not referring to some frustrating investments he made in solar stocks when composing lyrics for the song "Impossible Germany," but the last few weeks' action in solar stocks suggests that the title works pretty well for the alternative energy sector.

In the past week, "Germany to Kill Solar!" headlines hit the wires. This was, notably, one week after the "Germany Saves Solar!" headlines led solar stocks higher . Ionesco and Beckett would be hard pressed to create theater as absurd as the solar sector trading often presents for the investing public.

To recap: German demand in the fourth quarter of 2011 wildly surpassed expectations, with a demand frenzy ahead of 2012 annual subsidy cuts and cheaper-than-ever solar panel prices leading to what would be a few years' worth of installations for much of the world in a few months in Germany. That in turn led to bullish calls from Wall Street that the left-for-dead solar sector was back, and in Wall Street parlance, the shares oversold.

And that's not all.

The fact that Germany had installed 3.5 gigawatts of solar in the fourth quarter for a grand total of 7.5 gigawatts in 2011 would, no doubt, lead the Germany government to conclude -- for the umpteenth time -- that its method of slowing the growth of solar through gradual subsidy reductions wasn't working.

As such, Germany would have to take an even harder line against solar in 2012, but (always a "but" when politicians are involved) that harder line would probably take half the year to define by the German parliament and as such, the demand frenzy in Germany would continue through the first half of 2012, with one last boom fueled by the fear of the subsidy cuts to come.

Look up tortured logic in the dictionary and you might find German solar market supply/demand dynamics and German solar subsidy policy as listings number one and two.

Fast forward to this past week when the German hard line had already been set - at least according to Bloomberg, which reported that German Environmental Minister Norbert Roettgen (who has historically been an avid proponent for the solar industry) put in place an overhaul to Germany's current solar incentive scheme, moving to monthly vs. bi-annual cuts.

Solar shares tanked.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

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.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

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