By Jason Simpkins
Associate Editor
With the Summer Olympics looming, China’s reputation as one of the world’s biggest polluters is getting international attention.
Add soaring energy prices to the mix, and it’s no wonder why China is making a big move into the market for solar-energy technologies.
And as long as the prices of conventional fuels remain as high as they are now, those investments in energy alternatives will continue to increase.
What’s the attraction? Unlike many high-tech startups, solar-energy companies can become profitable very quickly, analysts say. For that reason, this surge in IPOs is an investment boom - but not a bubble.
"Solar companies, once they’re ramped up, they’re solidly profitable," Jeffries & Co. analyst Jeffrey Bencik told The Associated Press in a July interview. "This is not the Internet bubble. These companies have real products and real profits."
Soaring economic growth - primarily in China, but also in India, parts of Latin America and Eastern Europe - have sent crude oil prices soaring to record levels north of $80 a barrel, and have caused other commodities roar north, as well. And those spiraling energy and commodity prices have drawn the interest of retail investors, as well as institutional, private-equity and venture-capital investors, too.
The ultimate objective: Find the technological breakthrough that will one day enable oil, coal, and natural gas to be replaced with either alternative sources of energy, or even better with a clean, cheap, renewable fuel or energy source. As long as the prices of conventional fuels remain as high as they are now, those investments in energy alternatives will continue to increase.
In the United States alone, engineering, manufacturing and construction jobs related to the solar industry will total 30,000 by 2015, according to the report, "Solar Power Commercial Market Applications," from Energy Business Reports.
Eight Solar Companies to Watch
Several solar companies went public last year, screaming out of the gates as investors and handy investors hefty returns.
LDK Solar Co. Ltd. (LDK) is a leading manufacturer of multi-crystalline solar wafers, which are the principal raw material used in the production of solar cells.
After its June 2007 initial public offering (IPO), its shares rocketed 155% in less than four months. In the past month, it’s up more than 20%.
Yingli Green Energy Holding (YGE) is a vertically integrated photovoltaic (PV) product manufacturer in China. It designs, manufactures and sells PV modules and installs systems connected to electricity grids.
Since its IPO last June, Yingli’s shares have risen almost 115%, and almost 30% in the past month.
San Jose-based SunPower Corp. (SPWR), has been a major solar energy player since going public in November 2005. Its shares are up 218% since its IPO and up 20% in the past month.
Perhaps most impressive: JA Solar Holdings Co Ltd. (JASO), another solar cell maker, is up a massive 322% since its February 2007 IPO… and it’s still moving. It’s up almost 42% in the past month.
Five other Chinese solar companies have gone public in the past year and a half. In addition to JA Solar Holdings Co Ltd, other U.S.-listed China-based companies involved in the solar-power sector include:
- Solarfun Power Holdings Co. Ltd (SOLF), manufacturer of both photovoltaic (PV) cells and PV modules in China.
- Trina Solar (TSL), which makes standard solar modules ranging in power output from 160 watts to 185 watts.
- Canadian Solar Inc. (CSIQ) produces and sells solar cells and module products that are have residential, commercial and even industrial uses.
- Suntech Power Holdings Co. Ltd. (STP), maker of photovoltaic cells and marketer of integration services. Its products are used to provide standalone power for street lamps, garden lamps, telecommunications relay stations, and mobile phone networks.
- And China Sunergy Co. Ltd. (CSUN), which manufactures solar cells from silicon wafers.
This is no coincidence solar companies are sprouting up at such a fast pace. A mad rush to clean up the country before the Olympic games isn’t going to be enough to permanently squelch China’s pollution epidemic.
If the country is going to get the problem under control it’s going to have to count on alternative energy technologies like solar power for contributions.