Don't Miss the Comeback in Solar Stocks
Source: Seeking Alpha, StreetAuthority (9/30/10)
"2010 will likely turn out to be a banner year for the industry."
Despite those dire concerns, 2010 will likely turn out to be a banner year for the industry, with global solar spending set to more than double, according to UBS. Firm demand means that suppliers did not need to embark on profit-sapping price wars, as many had feared.
Lower costs and firm prices translates into stable or rising profit margins, which is just what we are seeing in recent industry quarterly reports. Sector share prices have rebounded from their spring lows, but they still have more room to run.
To be sure, the industry is in flux. Germany, which had been the biggest buyer of solar equipment, is likely to start spending less in coming years. And don't be surprised if a few new growth markets such as the Czech Republic start to disappoint on the heels of budget pressures. But elsewhere, especially in the United States, demand is really kicking into gear. As this table shows, the U.S. should emerge as the second-leading buyer of solar equipment by 2012 in terms of GigaWatts (GW) of power.