Solar energy shares fall on oil prices, stock fall, but investors still upbeat
Solar energy shareholders expressed concern about the possible impact of the downturn in oil prices and the tumble that Taiwan stocks took yesterday on their industry, despite a broadly positive outlook among investors.
Shares have already plunged for Green Energy Technology Inc. ( ), Neo Solar Power Corp. ( ), Solartech ( ), Gintech ( ), E-ton ( ), and Motech ( ), hitting their limits early. Experts believe the fall was caused by the wavering oil prices. Only Giga Solar Materials Corp. ( ), SinoAmerican Silicon Products Inc. (
) came out of the trading session in somewhat better shape, after suffering a less abrupt fall.
Analysts said that as the market is expecting oil prices to fall to US$30 per barrel due to oversupply worldwide, developments in the alternative energy industry will slow. They believe that low oil prices could have a negative impact on solar energy’s substitution benefits, and likely revise solar energy shares worldwide.
Currently, oil prices have fallen under the US$40 mark, which is a record low for the past six and a half years. Prices have seen eight consecutive tumbles, accumulating a price drop range over 3 percent, making it the longest fall in 29 years.
Others remain optimistic — solar energy factories will be able to benefit from growing demand, and will likely see a rise of 8 percent due to the rise in product prices in May. Such factors will help inject new motivation into Taiwan’s solar energy industries’ third-quarter performance, and “possibly turn losses into profits,” investors stated, as the third quarter is usually the peak season for the industry.
Bolstered by positive demands and gradually rising product prices, Solartech ( ) will likely see revenue of approximately NT$1 billion in August, setting a new record high for the last four years should the company achieve its goals.
Markets worldwide have not wavered in developing alternative energies as the solar energy market’s demands have not diminished, legal investors stated, even in the environment of unstable international oil prices.
Sino-American Silicon Chairman Lu Ming-guang ( ) also holds a positive outlook on the solar energy industry, stating both India and U.S. presidential candidate Hillary Clinton proposed or are currently pushing for similar energy policy platforms.
India’s solar energy installation capacity was estimated at approximately 3.5 GW this year, legal investors said. However as India is currently promoting its “Clean India” policy, which aims to clean the country’s roads, streets and infrastructure, investors expect that its installation capacity will see room for upward adjustment.
U.S. presidential hopeful Hillary Clinton also previously announced her renewable energy platform, hoping to install 500 million solar panels during her first four-year term as president, and provide renewable energy for all American households within 10 years.
Based on Clinton’s policies, the U.S. will possibly see an installation capacity of over 30 GW per year in the next four years. There is no reason to be “too pessimistic” about the future for solar energy as of now, investors stated.