Auriga Discusses California’s Proposed Renewable Auction Mechanism (RAM) – FSLR, YGE, TSL, WFR, STP, SPWRA

In recent days, California has proposed legislation that would help kick start smaller scale solar projects (1 – 20MW) using a feed-in-tariff system, but the rates would be set by an open bidding process which would help curb excessive rates for consumers while generating fair returns for the developer.  The Renewable Auction Mechanism (RAM) as it’s called is just a proposal at this point, but a final ruling could come within 30 days.  It’s likely not a question of will this become law, but when.  California prides itself on being a leader in the alternative energy movement and they will certainly view this legislation as another example of that leadership.

Mark Bachman of Auriga believes this paves the way for solar penetration not only in California, but the entire US as other states may adopt the elegant approach to subsidizing solar.  He goes on to say that this announcement far outweighs the recent subsidy cuts in France and could add 1000MW in solar installations over the next two years.

Here are the companies Mark sees benefiting from this legislation:

First Solar (FSLR): Best positioned because of its captive module supply and significant project development business (acquisitions of Turner Renewable Energy, Optisolar, NextLight). But more importantly, we believe the company can deliver the lowest $/kWh solution and garner the highest project returns. Click Here For Your FREE First Solar Technical Analysis

Yingli Solar (YGE): Yingli is the stealthiest play in the group. Yingli’s U.S. operations have been quietly establishing a beachhead here in the states and could surprise the market with significant module sales into the U.S. for projects covered by the RAM. Yingli’s low-cost products should produce very competitive bids. Click Here For Your FREE Yingli Technical Analysis

Trina Solar (TSL): Trina has just started to penetrate the U.S. market, but plans to ship several hundred MWs into this market by 2012. The recent 45MW supply announce with Southern California Edison is an indication of its cost competitive solutions.
Click Here For Your FREE Trina Solar Technical Analysis

MEMC (WFR): Through its acquisition of SunEdsion, MEMC could prove to be competitive with low cost modules from China. The 20MW restriction looks to play into MEMC’s (SunEdison) strength. Click Here For Your FREE MEMC Electronics Technical Analysis

Suntech (STP): Suntech has been a market leader in term of shipments in the U.S., so it has a well established position here already. In addition, the acquisition of EI Solutions and Suntech’s focus on being a module supplier, rather than a project developer, should enable the company to be a player in some of these projects. Click Here For Your FREE Suntech Technical Analysis

SunPower (SPWRA): Always a dark horse in this race because of its project development skills. We still see the broken cost-model as a disadvantage, but the company can always source more Serengeti modules from India in order to compete on a $/kWh basis. Click Here For Your FREE Sunpower Technical Analysis

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