The Week In Cleantech: March 24, 2012
March 20: Another Solar Stock Disappoints
- IBC Advanced Alloys Corp. (TSX-V:IB) (PINK SHEETS:IAALF), a beryllium alloy producer that's doing some ground-breaking work in the world of nuclear fuels, announced this morning that its advanced castings are being supplied for the European Space Agency's Automated Transfer Vehicle, which is expected to dock with the International Space Station in a little over a week.
For the sake of clarification, IBC serves a variety of industries, including automotive, telecommunications and a number of industrial applications. But I actually started following this one after discovering the work its doing in the world of nuclear fuels. It's not the company's main focus, but it's one I believe makes this a good long-term play on the development of “safer” nuclear technologies. (Full Disclosure: I currently own shares of IBC)
Don't know if today's news will really move the stock, but I do believe it'll put more eyes on it.
- For the third consecutive quarter, JA Solar (NASDAQ:JASO) posted a loss.
Not that I need to repeat the refrains of this sad song, but the disappointing loss comes as a result of falling prices and a slowdown in sales. JASO also forecast lower shipments for Q1. The stock is down about 9 percent in pre-market.
As I've mentioned in the past, it is unlikely that we'll see much in the way of good news for the solar sector anytime soon. That doesn't mean we don't see some fantastic opportunities in solar. The sector will continue to shake the laggards loose, sales will pick up, this annoying glut will eventually come to an end, and those who don't lose sight of the long-term picture here will do quite well. But this is the ultimate exercise in patience. My two cents: Be a fence-sitter for now, but be ready to scoop up some nice discounts later in the year.
March 21: Solar Tariff Does Not Change Fundamentals
- Chinese solar stocks got a fat boost yesterday after it was announced that the U.S. would impose lower-than-expected import fees on solar panels produced in China. Even after a disappointing quarter and a 9 percent fall in share price in pre-market, JA Solar (NASDAQ:JASO) ended the day up 4.4%. The boost might stick around for a few days, but the tariff decision has not changed the fundamentals. We still maintain that the solar sector will remain unstable well into the second quarter.
For a more personal take on this whole thing (where you can blast me for being misguided or applaud me for pointing out the starry-eyed elephant in the room), you can read my thoughts on the issue here.
- In other solar news, Daqo New Energy (NYSE:DQ) announced Q4 and FY, 2011 this morning. To be honest, I'm tired of repeating the same bearish reports on this sector. But if you need a reminder as to why we're sitting on the fence with solar right now, you can check out Daqo's earnings here.
Daqo is down more than 10 percent in pre-market.
March 22: First Solar (NASDAQ:FSLR) Sells 50 Megawatts
- Enbridge, Inc. (NYSE:ENB) announced this morning that it will acquire a 50 MW solar project developed by First Solar (NASDAQ:FSLR). With this acquisition, Enbridge now has a piece of the US solar market. First Solar will recognize revenue from this project – the Silver State North project – after final testing and commissioning. This should be around Q2, 2012.
Of course, Enbridge's decision to grab some U.S. solar doesn't mean the company's shifting gears. Sure, you can definitely make some decent bread from some of these bigger solar projects in the U.S. But the lion's share of this company's profits won't be coming from solar. In fact, CEO Pat Daniel recently confirmed that ENB's future is pretty much natural gas. And mark my words, that's a solid future to have.
Although natural gas isn't quite as “clean” as some would have you believe, there's a ton of dough to be made here. My favorite play on natural gas right now is Linn Energy (NASDAQ:LINE). The company recently acquired BP's natural gas assets in Kansas and about another $175 million worth of natural gas assets in East Texas. It ponies up a fat 7% dividend, and yes, you better believe I own shares.
March 23: Another DuPont (NYSE:DD) Solar Deal
- China Sunergy (NASDAQ:CSUN)
has announced that it and DuPont (NYSE:DD)
have signed a Letter of Intent for strategic collaboration
relating to solar pv technologies, materials, power transformers
and insulation over a three-year period.
Although few are aware of this, DuPont is actually one of the biggest players in the solar space. The company's materials are in about 70 percent of the world's installed panels. Last year it did about $1.4 billion in solar sales, and the company expects to break the $2 billion mark by 2014.
Today's news comes just one month after DuPont announced a $100 million deal with Yingli (NYSE:YGE) to supply its polyvinyl fluoride film and photovoltaic “paste” which will be used in the production of modules.
China Sunergy is up about 7% in pre-market.
Disclosure: Long IAALF
Jeff Siegel is Editor of Energy and Capital, where these notes were first published.
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