(Reuters) - Jefferies & Co said the global solar sector offers stronger-than-expected growth for investors, as module demand and average selling prices (ASPs) are likely to be significantly better than current market expectations.
Analysts estimate global solar sales to hit record above 12,000 megawatt this year, spurred by strong demand in top market Germany, where many developers have been racing to build projects as incentives go down. A subsidy cut of at least 16 percent took effect in July.
“If there ever was a time to install solar in Germany, it is 2011,” analyst Jesse Pichel wrote in a note to clients.
Pichel said module ASPs would be better than expected for 2011. The analyst said he has confirmed first-half 2011 prices of $1.60-1.70 per watt from a number of large distributors developers, and installers.
Pichel raised Canadian Solar Inc by a notch to its highest rating, while maintaining “buy” on the stocks of JA Solar Holdings, Solarfun Power Holdings, Trina Solar and Yingli Green Energy.
“The euro strength in the recent week represents further potential upside. Forex losses for many of our favorite Chinese suppliers should turn into massive forex gains for the fourth quarter if the euro holds at these levels,” the analyst wrote.
The euro hit a five-month high against the dollar on Thursday after banks borrowed less than expected at a European Central Bank tender, reversing earlier losses on concerns about Irish fiscal and banking problems.
Reporting by Krishna N. Das in Bangalore;