There was a rush of Italian solar installations at the end of 2010 which boosted topline results for many module manufacturers. Also, guidance for 2011 was largely positive for solar companies with many expecting the US market to grow considerably and help offset a potential decline in Germany. Overall the top decliners represented a mix of different technologies, but many shared exposure to China where inflation fears are rising.
Among the US solar names, Sunpower and MEMC Electronic Materials were up 27.0% and 22.4%, respectively. Both companies have strong exposure to the booming Italian market. Top-weighted First Solar was down 5.6% though, as its earnings announcement was a rare miss for the Company. First Solar also has several large-scale US projects which are exposed to the Department of Energy Loan Guarantee Program that has been under attack by the new Republican Congress. The top US inverter manufacturer Power-One was down 23.1% in February, attributable to disappointing earnings, pricing pressure, and inventory supply commentary for the global inverter market.
All three European solar companies ended February in positive territory. Module manufacturer SolarWorld ended up 20.4% on strong Italy sales. Inverter manufacturer SMA Solar Technology was inline with its peers at 6.3%. And vertically integrated Renewable Energy Corp end up 5.3%.
Wind stocks saw mixed results in February. Spanish turbine manufacturer Gamesa led the group with a 14.1% following stellar earnings results which included a surge of product orders at the end of 2010. Top weighted Vestas finished down 0.9%, despite an end of month rally fueled by the announcement that it been selected to supply turbines for a significant offshore wind farm in Germany. Both large Spanish project developers underperformed the index: EDP Renovaveis was up 0.2% while Iberdrola Renovables was down 1.4%. Iberdrola especially has been negatively impacted its exposure to weak natural gas prices in the US.
Biomass electricity generator Covanta was flat in February; quarterly earnings were inline with analyst expectations. Energy efficient lighting Company Cree was up 4.3% on generally positive analyst commentary.
Robert Lahey, Ardour Capital Investments, LLC. (cm)
