Major Chinese Manufacturers Address Fear Over German Incentive Cuts

Apprehension abounds in the lead up to a second round of cuts to German solar incentives expected this summer. Major solar firms, many doing the bulk of their business in Germany, are scrambling to diversify into other markets. Many are feeling temporarily good after a rush of sales for companies looking to get in under the wire, but uncertainty still plagues the second half of the year, leaving solar energy stocks as volatile as ever.

Last week, a number of major Chinese manufacturers and suppliers addressed these issues. Suntech Power Holdings and Trina Solar reported quarterly earnings that far exceeded expectations due to in-house cost reductions easily outstripping a 3 percent decline in sales. Canadian Solar and Solarfun, whose recent earnings and subsequent outlooks are not as strong as Suntech and Trina Solar, still remained confident that losses in Germany will be made up elsewhere throughout 2010.

Every company points to the same reason for relative optimism. Both the United States and China are expected to have a blossoming 2010 in solar sales and installations. Demand elsewhere in Europe is increasing rapidly as well, say China’s solar leaders, and should do well in picking up the slack.

At the same time, the Chinese presence in the US is increasing fast, especially in California, far and away America’s leader in solar power. In just three years, Chinese companies’ share of the California market has increased from 2 to 46 percent. So if it truly turns out to be a booming year for US solar power, Chinese solar giants like Suntech, Trina Solar and others can expect to reap a lot of the benefits.

Via Fool.com

Photo Credit: SolarPlaza

Posted on March 22nd in Solar News by Dan.