Kravetz shorts European solar manufacturers

Shawn Kravetz, president and founder of Esplanade Capital, speaks at the Reuters Investment Outlook Summit in New York, December 6, 2010.

NEW YORK (Reuters) - The solar industry will have its place in the sun for many years but Chinese manufacturers likely will win out over European players, hedge fund manager Shawn Kravetz said on Monday.

"The Chinese will crush them (European manufacturers) in up markets, and they will still make money in down markets," Kravetz, who runs Esplanade Capital in Boston, said at the Reuters 2011 Investment Outlook Summit in New York.

Kravetz, who specializes in retail and energy stocks, is betting that European solar equipment manufacturers' stock prices will fall while those of Chinese competitors will rise.

Detailing his favorite ideas for solar stocks to short, Kravetz named Germany's Solarworld and Norway's Renewable Energy Corp . On the long side, among others, he likes China's Trina Solar.

"The Europeans just can't compete," Kravetz said, because of higher labor costs, equipment prices and even electricity costs compared with the Chinese.

Solar energy has captured the interest of investors and manufacturers in the last years in a drive to go beyond traditional fuel sources like coal and natural gas.

But the early leaders in the field, European manufacturers, are now finding that Chinese competitors pose a real threat, Kravetz said.

(Reporting by Svea Herbst-Bayliss; Editing by Ros Krasny and Leslie Adler)