Solar Stocks Plunge Worldwide as Germany Accelerates Rate Cuts
January 20, 2012, 5:44 AM ESTBy Natalie Obiko Pearson
Jan. 20 (Bloomberg) -- Solar stocks plunged around the world after Germany, the largest market for sun-based power, said it will accelerate reductions to preferential rates it pays to solar utilities to reduce spiraling costs.
GCL-Poly Energy Holdings, Asia’s second-biggest maker of polysilicon used in solar panels, fell the most in more than two months on the Hang Seng Composite Index, closing down 6.3 percent to HK$2.52. Seoul-based OCI Co., Asia’s biggest polysilicon maker, fell 2.3 percent after declining as much as 4.1 percent in earlier trading on the Korea Stock Exchange.
The Asia trading slump follows declines yesterday in the U.S., where Suntech Power Holdings Co., the biggest solar-panel maker, Trina Solar Ltd. and First Solar Inc. helped drag the Bloomberg Global Leaders down by 3.4 percent yesterday after Germany said it will cut its feed-in tariffs monthly instead of the current twice a year. Feed-in tariffs are premium rates paid for electricity from solar energy to stimulate investment.
Germany added a record 7.5 gigawatts of solar panels last year, more than double the government’s target, raising the cost of state subsidies for sun-based power.
A solar supply glut could mean many polysilicon producers will either operate at a loss until cash runs out or close their plants, Brett Prior, an analyst at GTM Research, said in a report yesterday.
--With assistance by Stuart Biggs in Tokyo and Christopher Martin in New York. Editors: Alex Devine, Reed Landberg
To contact the reporter on this story: Natalie Obiko Pearson in Mumbai at npearson7@bloomberg.net
To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net
