Suntech Power (STP), a company I discuss with Jim in the video above, is rumored today as a takeover target for Warren Buffett, a story which has hoisted its shares nearly 20% today. This rumor makes for an interesting side note but does not change at all the thesis that Jim and I discuss here.
NEW YORK (
) -- I was talking with Jim Cramer Wednesday about the massive move in
(FSLR - Get Report)
on Tuesday and whether solar in the U.S. has again become investable, or even tradable. The stock closed down 7.7% to $36.32 Wednesday.
I think it has. Solar panel prices have plummeted more than 70% in the last three years, almost entirely due to the Chinese subsidy program that has allowed producers like Suntech (mentioned above),
to flood the global market with cheap panels.
These low prices have destroyed the U.S. flagship solar company First Solar, dropping its share price from a (quite silly) high of over $300 a share in 2008 and over $150 a share as recently as April of 2011 to a low of almost $11 a share. But there are indications that the Chinese are abandoning their unsustainable subsidy policy.
Suntech, the flagship Chinese solar panel manufacturer, recently missed a $540 million convertible bond payment and was forced into bankruptcy court. So far, the Chinese have not established a bail-out program for Suntech's almost $2 billion in total debt.
Here in the United States, there is a new market outside of consumer installations that is developing to the benefit of First Solar -- with the utilities. In its upgraded guidance report, First Solar mentioned one of their premier installations, with utility
I talk more about what I think is the trajectory of the solar trade going forward with Jim in the video above.
This article was written by an independent contributor, separate from TheStreet's regular news coverage.