CHINA SOLAR STOCK CORRECTION

China's Solar Power Analysts Can't Agree Why Shares Are Plunging

September 24, 2015 (Bloomberg News)

“…Since peaking in May, the NYSE Bloomberg Global Solar Energy Index of 127 companies has plunged 47 percent, more than quadruple the pace of the MSCI World Index. Yet panel makers anticipate record installations this year and have mostly recovered from a plunge in prices that slashed margins at the beginning of the decade...So why are shares not following industry fundamentals? Analysts offer a number of explanations ranging from the slump in oil prices hurting confidence in all energy companies to the fact that developers in China, the world’s biggest market for the technology, aren’t getting paid on time…

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“The world may install as much as 61 gigawatts of solar panels in 2015, up 36 percent from the previous year, according to Bloomberg New Energy Finance. The London-based researcher expects installations to rise to almost 70 gigawatts next year…China’s solar companies are tumbling because of systematic risks, [according to some analysts]…The relatively unknown profile of Chinese solar companies may also be behind the declines, some analysts say… While oil isn’t widely used for power generation, the cost of other fuels used to make electricity such as coal and natural gas are often fixed in contracts linked to crude. So cheap oil translates into cheap energy, which makes more-costly photovoltaics less attractive…China’s solar industry is warning that the government itself is undermining the industry it nurtured by failing to pay for power in a timely manner…In August, the government said it expects consolidation to accelerate among solar companies.” click here for more

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