REC upbeat view on 2011 prices lifts shares
OSLO (Reuters) - Norway's REC is increasingly upbeat about solar energy prices next year as the market expands despite lower subsidies, Chief Executive Ole Enger told Reuters, sending the firm's shares higher.
"If you had asked me a month ago, I would have said that there was likely to be a considerable price decline (in 2011)," Enger told Reuters in an interview on Monday. "Today, we see prices for the first half of next year holding up better than we had expected a month or two ago."
Shares in REC, one of the world's biggest solar energy equipment producers, were up 1.9 percent at 20.13 crowns by 1444 GMT, having been half a percent off before Enger's comments. Oslo's main index was down 0.38 percent.
Enger said that prices would likely be pressured next year due to a slowdown in solar energy growth rates as well as new supplies hitting the solar market, but that they should not be as bad as the company originally forecast.
Enger said the global solar market should grow in 2011 because it would be economically viable for people and companies to invest in solar energy despite decreasing subsidy schemes in a number of key markets such as Germany.
"If you take the German market, you see a quite reasonable return on investment even with the reduced subsidies," he said, calling cuts in state support schemes "generally wise."
"That is why we do not forecast a collapse in the market -- to the contrary it will likely be growing, even if the growth will be slower," he said, adding that the global solar market has grown by some 60-80 percent per year over past years.
Moreover, he said that solar energy subsidy schemes may be introduced in new markets, spreading the reach of the industry which has been focused on western Europe, the United States, as well as some Asian countries.
He said that REC's flagship new plant in Singapore has been "performing really well" since its early 2010 launch and that the production ramp-up was "better than anticipated."
Enger said REC's Moses Lake, Washington, U.S., silicon plants (Silicon III and Silicon IV), originally seen to be a growth engine, were improving after start-up troubles during the past year.
"Silicon III is doing better every quarter and the start-up of Silicon IV is much better than Silicon III," he said.
Enger said he could not comment in detail on third-quarter results expected on October 26, but said they were "in line" with REC's guidance for rising earnings before interest, taxes, depreciation, and amortization and overall revenues during the second half of the year.
(Editing by Sharon Lindores)
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