Evergreen Solar, has just signed
a 10 year polysilicon supply agreement (and is testing new stock highs).
That's definitely the longest forward agreement I've heard of in the
solar business and shows tremendous long-term confidence by the firm in its activity. After all,
if you were in management 10 years ago - in any business - where do you think you would have
tried to make an investment decision
over 10 years and got it right?
A lot of the publicity for solar stocks
in recent times has focussed either on low-cost Chinese solar plays,
high-tech thin film manufacturers or a European, usually German,
manufacturer boosting output, again.
Evergreen Solar - like several American solar stocks - has not got a lot of attention which surprises me a bit. That's why I'm labelling it the "Quiet American". Why haven't we heard more about this stock when it has near doubled in value since July '07?
Evergreen's USP is its patented string-ribbon wafer technology, pictured here in the finished product, which from appearances, doesn't look radically different from any other silicon-based solar cell. The long and short of this technology
that they require far less expensive silicon in order to achieve the same photovoltaic effect -
more details here. The paradox here is that if Evergreen's exposure to silicon is less of an upside risk on price than for other firms, why are they hedging their exposure to it better than anyone else?
I don't have an answer.
Leaving silicon aside, possibly far more important, as I opined earlier in the year, is their
partnership with Q-Cells and Renewable Energy Corp, 2 of the giants of the solar business.
Analysts have been bullish about Evergreen for a while and the market is only now catching up. And it's actually just today, that it has been given
a downgrade to "market perform" by Janco Partners.
All in all, I do wonder if there's a limit closer in sight to the German PV market that the world has yet to recognise. Isn't it feasible that the USA constitutes - in the near future - a German solar market on steroids or even stronger substances
if grid-parity is really achievable by 2015?
Certainly, the best of the growth story of the German wind industry is past its best. How many more gigawatts of wind can they really add and do something useful with it?
Maybe it's time to start thinking about the German PV market - 60% of the world market - in the same way. The contrast meanwhile with California and many other sun-blessed US states with woefully underexploited solar power ought to merit some serious attention.
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