Solar energy equipment imported from China will now have duties of as much as 4.73%, according to the U.S Commerce Department. The tariff is modest compared to most trade cases, but still an important step in giving American companies a fighting chance in the markets.
U.S. suppliers of solar equipment have long complained that Chinese manufacturers benefit from high government subsidies that allow them to sell panels at a discount. Attempting to match prices has meant razor-thin price margins for other producers. "The prices of solar modules, or panels, fell 50% last year, largely as a result of the cheap Chinese imports," explained Timothy Brightbill, an attorney for SolarWorld, before the Commerce Department's decision was made.
As per the U.S. decision, Suntech Power Holdings was told to pay a 2.90% tariff, while Trina Solar (NYS: TSL) will pay 4.73%. All other Chinese solar-equipment firms were told to pay 3.59% (via Bloomberg).
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So, what effect will this tariff have on solar stocks?
The case had been high profile, and many expected heavier tariffs than what was given. The Wall Street Journal reports the lower-than-expected duties sparked a stock rally among large Chinese solar-panel makers. Meanwhile, American depositary shares of Suntech Power Holdings jumped 14.06%, while Trina Solar Ltd. rose by 7.85%.
Indeed, "Both sides claimed victory in the Commerce Department's decision Tuesday."
Here's a list of solar companies trading on the U.S. exchanges and their price changes on Tuesday, the day of the announced decision.
How do you think the price war will impact these companies? (Click here to access free, interactive tools to analyze these ideas.)
1. First Solar (NAS: FSLR) : Manufactures and sells solar modules using a thin-film semiconductor technology. Market cap of $2.38B. Current price at $27.46. Change in price on 3/20 was -4.22%.
2. JA Solar Holdings (NAS: JASO) : Engages in the design, development, manufacture, and sale of photovoltaic solar cells and solar products, which convert sunlight into electricity in the People's Republic of China. Market cap of $324.90M. Current price at $1.9. Change in price on 3/20 was 4.4%.
3. Suntech Power Holdings: Engages in the design, development, manufacture, and marketing of photovoltaic (PV) products. Market cap of $646.74M. Current price at $3.57. Change in price on 3/20 was 14.06%.
4. Trina Solar Limited: Designs, develops, manufactures, and sells photovoltaic (PV) modules worldwide. Market cap of $584.42M. Current price at $8.38. Change in price on 3/20 was 7.85%.
5. MEMC Electronic Materials (NYS: WFR) : Engages in the development, manufacture, and sale of silicon wafers for the semiconductor industry worldwide. Market cap of $923.20M. Current price at $4. Change in price on 3/20 was 0.25%.
6. Yingli Green Energy Holding (NYS: YGE) : Engages in the design, development, manufacture, marketing, sale, and installation of photovoltaic (PV) products in the People's Republic of China and internationally. Market cap of $675.47M. Current price at $4.27. Change in price on 3/20 was 12.07%.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Rebecca Lipman owns shares of FSLR. Institutional data sourced from Fidelity, all other data from Finviz.
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