Jefferies & Co. solar energy technology analyst Jesse Pichel today writes that an anticipated cut in solar power project subsidies by Germany next week will likely not forestall projects, though it will lead to reduced selling prices for the modules sold into solar panel installations.

Pichel sees a 9% to 12% reduction in the “feed-in tariff” in Germany, though he still sees the country offering a “robust” 5 to 6 gigawatts of installation this year. The weak pace of installations in the second half of last year basically means the cuts won’t curtail installations this year.

However, he also sees an acceleration in price declines for modules, perhaps after a 9% subsidy cut starting in April. Without saying how fast the pace of decline will be, Pichel writes that rooftop installations can support a price of $1.50 per module, while larger systems require something more like $1.38 and ground projects would need $1.25 per module.

That said, Pichel maintains his ratings on his coverage companies, with his Buys being: Canadian Solar (CSIQ), JA Solar (JASO), Solarfun (SOLF), Germany’s SolarWorld AG (SWV), Trina Solar (TSL), and Yingli Green Energy (YGE). He cut estimates for this year on all of those names, by between 20 and 30 cents per share.

source: blog.barrons

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