I just took a look at the universe of 89 solar stocks in my database. At the end of the Panic of 2008 only 23 companies passed my screens for index tracking. Running the screens today, I pass 38 companies, a dramatic increase in investable firms.
The screens are typical for creating an index: the energy source is solar, the product is PV related or electricity, the market cap is greater than USD 150 million, over 50% of the business is from solar activities, the firm trades on a recognized (non-OTC) exchange for over 6 months, at least .25% of the shares trade on average over a three-month period with a daily value of at least USD 250,000.
I also eliminate companies from consideration that were previously tracked but have fallen below USD 100 million in market cap. The four firms that failed this test are Energy Conversion [ENER], Solon [SOO1.F], Solar-Fabrik [SFX.F], and Evergreen [ESLR].
There are 4 new firms I track in the solar sector with market caps greater than USD 1 billion. The largest, GCL-Poly [3800.HK] is nearly as large at First Solar [FSLR]. The three other new billion club members are SMA Solar [S92.DE], GT Solar [SOLR], and Hanan Xindaxin [300080.SZ].
For a complete list register on the NEV research site and look at the Solar sector report.
I’m seeing some interesting shifts in the solar sector. With 67 solar IPOs from 2005 through 2010 (where there were 10), there have been no IPOs in 2011. We are also seeing an increasing number of firms entering the wholesale power generation business and cell prices have fallen. (It’s a lot easier to sell in volume with 1 – 10 MW wholesale projects versus 5 kW end-use projects). The industry is maturing, but still very dependent on governmental support as evidenced by Energy Conversion’s woes in March when a shift in subsidies in France and Italy crushed revenue. In North America, the shift to wholesale generation puts PV in direct competition with super-efficient combined cycle alternatives burning shale gas. That said, the downward march in prices, and the larger stable of companies represents significant progress in the sector.