Solar Stock Review – First Solar

Any news about the environment or environmental issues are always good to see in more mainstream publications. Today there is an article about First Solar and how two analysts think the stock will fair. I will start out by saying that I am not a financial expert, though I do follow the markets and understand what they are talking about, none of this is an endorsement to buy or sell any stock. I just think that looking at the long term analysis by investors of renewable energy sources help determine perception. If the large investors are all against a stock or sector in general they may have a lot of pull with government officials as to what companies or industries deserve subsidies.

The Bull analyst brings up some good point on how loans from the DOE will help fund some large projects including a 550 megawatt project. The stock has been beaten up over the last few years due to competitors pricing coming down and leading to increased competition. Overall he expects the stock to rebound and regain most of the losses of the past year. The Bear analysis paints a much gloomier picture. He argues that a lot of the industry is still reliant on government subsidies. Also that there are probably too many competitors and there will probably need to be long term consolidation for these companies to be profitable long term. I think both of his points are fair as he states that with federal governments struggling to make ends meet such as Germany has already started cutting subsidies. Without these subsidies a lot of consumers for these products may not invest in solar panels. Overall I think both analysis are fair and the price of solar panels needs to come down further before all the government subsidies dry up for First Solar and other companies to continue growing long term.