Wedge Partners Says China Solar Companies Slowing Production

According to Barrons, Wedge Partners was out with a research note this morning saying that the China based solar companies are slowing production in anticipation of falling demand and prices.

Some highlights:

– Suntech (STP) is laying off about 10% of its employees, idled half its production lines and shelved plans to expand to 1.2GW by the end of the year

– JA Solar (JASO) is seeing customer orders down drastically and half of its production lines closed

– Yingli Green Energy (YGE) has postponed plans to expand to 600MW which it just announced a month ago

– Trina Solar (TSL) halted plans to expand to 700MW

This industry was in great need of a shakeout and its time to start keeping an eye on those solar companies that will emerge as the winners as the industry matures and the economy improves.  I like First Solar (FSLR) and Energy Conversion Devices (ENER) as individual plays while the Claymore Global Solar ETF (TAN) and Market Vectors Solar ETF (KWT) offer good diversified approaches.

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