Yingli Green Energy (YGE) Seeing Solar Surge In Germany & Italy

Yesterday, the solar industry got a jolt of good news when Yingli Green Energy (YGE) reported in an article over at Bloomberg that it’s seeing a surge in sales in Germany and an acceleration in Italy.  Solar pricing has dropped so low (40% drop in panel prices) that developers are seeing the opportunity for significant returns on investment and jumping back in.

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“There’s a big rush on in Germany now after it was slow at the start of the year.  Prices have fallen to a level where the economics are very attractive.  I don’t think we’re going to see these huge price falls again next year because of the compression in margins we’ve already seen,” said Darren Thompson, Yingli’s managing Director in Europe.

It should be noted that this news out of Yingli doesn’t necessarily indicate that the industry as a whole is seeing a significant recovery, but that Yingli is simply taking market share which isn’t out of the question.  I have said over the past couple months that Yingli is now one of my top solar stocks and they indicated in their last earnings report that they are indeed taking market share.  Just last week STR Holdings (STRI) reported that they were not seeing a 2nd half recovery in Europe as had been previously expected. It’s probably a bit of both… a bottoming out in Europe and Yingli taking share.  Looking ahead to next year, Thompson indicated he doesn’t expect to see huge growth.  The company is becoming less reliant on Germany and looking to the US and China for growth opportunities. 

Shares of YGE were up nicely yesterday, but lacked conviction as indicated by the lack of volume behind the move.  I continue to believe that solar stocks are showing an increasing number of signals that they are stabilizing at current levels.  I’m not seeing enough evidence yet that a definitive bottom is in. 

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