Yingli Green Energy Shares Dropped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Chinese solar manufacturer Yingli Green Energy (NYS: YGE) have fallen 12% today after Germany said it would change its feed-in tariff system.

So what: The semiannual cut of Germany's solar feed-in tariff is apparently being scrapped for a monthly cut, according to Environment Minister Norbert Roettgen. A flood of solar installed before the most recent cut, at the end of 2011, has the country fearing that falling solar costs will outpace the country's feed-in tariff reductions.

Now what: Since more than twice the goal of 3.5 GW of solar was installed last year, there have been changes rumored for weeks. A cap was thought to be a solution, but apparently more frequent cuts are the solution they've come up with. The strong start to the year for solar stocks isn't lost with this news; it just adds a bit of uncertainty in the German market. Germany has provided most of the world's demand for years, but that is changing quickly, and the country still figures to have a prominent role in solar during 2012.

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At the time thisarticle was published Fool contributor Travis Hoium has no position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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