Suntech Power Shares Plunged: 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 solar manufacturer Suntech Power (NYS: STP) fell as much as 10% today after rumors surfaced that Germany could cut feed-in tariff rates further.

So what: After 3 GW of solar was installed in Germany in December, there have been rumors that another big cut was on its way. A cut far worse than some expected could be coming, including a 15% cut in April and a 2% monthly cut after that.

Now what: For now, these are just rumor, but it does appear certain that a cut in feed-in tariffs is coming to Germany. That could put a damper on demand in the short term, but I think the fourth quarter and early 2012 have been strong enough to ease fears for most suppliers. The solar market is now global and even Germany can't derail this train's momentum.

Interested in more info on Suntech Power? Add it to your watchlist byclicking here.

At the time thisarticle was published Fool contributor Travis Hoium does not have a 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 may not 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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