Low pricing key in solar sector crisis: UBS

Investors should look for solar companies offering their products at lower prices compared with their peers, as they are likely to emerge as winners from the current industry crisis, a UBS fund manager told Reuters.

He aded European solar module makers will continue to lose market share to more aggressive Asian players who are offering their products at much lower prices.
“The Asian players in the sector have caught up — mainly through lower prices — while the European (players) have lost ground. And this will continue for a while. In the end, it’s about costs. Modules will become a commodity.”

The UBS fund has among its top 10 holdings European renewable companies such as Spanish wind power companies Iberdrola Renovables and Gamesa Corp, as well as Wacker Chemie, a German company that also makes silicon for the solar industry.

Wacker “operates in a part of the solar value chain where competition is not as high as in the area of modules and installation. They are delivering high quality in a very capital-intense business,” Peterhans said.

European solar companies have already started to move production to low-cost countries as Asian players eat into their domestic markets, but it will take time before this translates into hard figures.

Reuters