Alternative Energy Watch: Different Views on 2011 Demand for Solar, GE Buys Again (JASO, FSLR, WFR, GE, ARVCY, ABB)

Here’s our daily report on developments in solar and wind power, alternative fuels, and other news related to the alternative energy sector. Germany’s largest maker of solar PVs has warned that 2011 profits may suffer from the cuts to government subsidies in Europe. Q-Cells SE’s CEO does not expect any significant impact from the disaster in Japan on sales of solar cells, nor does he see any impact from the recent election of Green Party members in Germany’s regional elections.

Not everyone agrees. Bloomberg New Energy Finance believes that solar panel installations could grow by nearly 50% in 2011.  The company has raised the top end of its estimate for 2011 from 21,500 megawatts to 28,000 megawatts, up from about 18,500 megawatts installed in 2010. Bloomberg New Energy Finance cites both JA Solar Holdings Co., Ltd. (NASDAQ: JASO) and First Solar Inc. (NASDAQ: FSLR) as being the low-cost leaders this year.

The analysts also believe that MEMC Electronic Materials Inc. (NYSE: WFR), makers of silicon wafers for solar PV cells, is well-positioned for profit growth in 2011. Total industry output of polysilicon is about 24,000 megawatts, meaning that MEMC’s products will be in high demand. First Solar, which does not use polysilicon wafers, could also make up any difference if the demand exceeds the total polysilicon available.

China slowed down its aggressive plans to develop 100,000 megawatts of nuclear power capacity by 2020 after the damage at Japan’s Fukushima Daiichi plant. The country had planned to have about 43,000 megawatts online by 2015, up from about 11,000 megawatts at the end of 2010. But an official of the state electricity council does not believe that target will be met, and the 2020 target could drop to 90,000 megawatts.

This is not good news for developers of nuclear plants. General Electric Co. (NYSE: GE), Toshiba/Westinghouse, and France’s Areva CIP (OTC: ARVCY) held high hopes for a burst of nuclear plant-building in China. Areva’s contract to build six plants in India could also be in jeopardy due to a corruption scandal in the country.

And speaking of GE, the company has announced the purchase of a 90% stake in French electrification and automation equipment firm Converteam for $3.2 billion. GE will purchase the remaining 10% of the company from Converteam’s senior managers for no more than $480 million over the next two to five years.

This deal is likely a counter-move to Swiss-based ABB Ltd.’s (NYSE: ABB) acquisition of Baldor Electric Co. that was completed in January 2011. ABB paid $3.1 billion for Baldor and assumed $1.1 billion in Baldor’s debt. Both Converteam and Baldor make and sell precision electric motors that are essential in all sorts of industrial automation projects. The two companies’ motors are also heavily used in alternative energy projects related to solar, wind, and the smart grid.

Paul Ausick