Solar Investors Could Be in for a Rude Awakening Come 2011 (TAN, ESLR, TSL)

After surging for most of the summer and early fall, the solar sector has been struggling lately. For the month of November, the Guggenheim Solar ETF (NYSE:TAN) — which seeks to replicate the price and yield performance of the MAC Global Solar Energy index — slipped close to 20 percent amidst growing concerns regarding US complaints that China is subsidizing solar. The solar sector pulled back further after reports signaled declines in government subsidy support from European nations such as Germany and France. The Bedford Report examines the outlook for companies in the Solar Industry and provides research reports on Evergreen Solar, Inc. (NASDAQ: ESLR) and Trina Solar Ltd. (NYSE: TSL). Access to the full company reports can be found at:

Presently Germany consumes more than half the world’s supply of the modules that turn sunlight into electricity. The head of Germany’s BSW solar industry, Carsten Koernig, recently said that the country will add a record 8 GW of solar power in 2010, however he added that he expects growth to cool in the years ahead to between 3 and 5 GW per year.

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2010 was a record year for demand in the solar sector. Many industry heavyweights saw their stocks more than double amidst strong earnings reports.

For the third quarter Trina Solar posted earnings of $1.08 per share on revenues of $508 million. Revenues more than doubled year on year. Trina said it expects to reach as much as 1.1 gigawatts of annualized capacity by year’s end. Solar products maker, Evergreen Solar, posted third quarter revenue of $86.5 million and narrowed its loss to $27.2 million and 13 cents a share.

Yes, 2010 was a superb year for many solar stocks, but going forward there is certainly plenty of uncertainty. Credit Suisse downgraded the sector last month based on industry wide oversupply, and concerns about weaker demand in 2011.

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Guggenheim Solar ETF Holdings (NYSE:TAN)

Name Symbol Weighting
FIRST SOLAR INC (FSLR) 13.79%
TRINA SOLAR LTD-SPON ADR (TSL) 6.08%
MEMC ELECTRONIC MATERIALS (WFR) 5.70%
RENEWABLE ENERGY CORP ASA (REC) 5.53%
MEYER BURGER TECHNOLOGY AG (MBTN) 5.25%
SUNTECH POWER HLDGADR (STP) 4.44%
YINGLI GREEN ENERGY HOLDING-ADR (YGE) 4.21%
JA SOLAR HOLDINGS CO LTD-ADS (JASO) 4.19%
SUNPOWER CORP (SPWRA) 4.00%
SOLARWORLD AG (SWV) 3.97%
SMA SOLAR TECHNOLOGY AG (S92) 3.78%
LDK SOLAR CO LTD – ADR (LDK) 3.49%
GT SOLAR INTERNATIONAL INC (SOLR) 3.46%
RENESOLA LTD ADR (SOL) 2.76%
STR HOLDINGS INC (STRI) 2.53%
CANADIAN SOLAR INC (CSIQ) 2.47%
SOLAR MILLENNIUM AG (S2M) 2.39%
SATCON TECHNOLOGY CORP (SATC) 2.22%
CENTROTHERM PHOTOVOLTAICS AG (CTN) 2.14%
PV CRYSTALOX SOLAR PLC (PVCS) 1.77%
ENERGY CONVERSION DEVICES INC (ENER) 1.72%
SOLARGIGA ENERGY HOLDINGS LT 757 1.57%
Q-CELLS AG (QCE) 1.57%
ROTH & RAU AG (R8R) 1.54%
PHOENIX SOLAR AG (PS4) 1.51%
MANZ AUTOMATION AG (M5Z) 1.29%
EVERGREEN SOLAR INC (ESLR) 1.23%
JINKOSOLAR HOLDING CO ADR (JKS) 1.16%
CONERGY AG (CGY) 1.16%
CHINA SUNERGY CO LTD (CSUN) 1.01%
SOLARFUN POWER HOLDINGS CO LTD (SOLF) 0.88%
SOLARIA ENERGIA Y MEDIO AMBIEN (SLR) 0.71%
SOLON AG FUER SOLARTECHNIK (SOO) 0.48%
EURO   0.00%

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