Independent Solar Project Developers are fast becoming extinct as Solar Panel Producers are fighting to gobble them up.The Solar Pipelines developed by these project developers have become very valuable for Module Producers who want to lock in to their captive demand.Despite a 140% y/y growth forecast in Solar Demand this year,the Solar Panel Production has managed to keep up.Huge amounts of capacity have been built up with Demand still precariously dependent on European Government Subsidies.There is always the danger of a Spanish meltdown happening in a crucial market which could lead to a major decline.Sunpower,First Solar and MEMC have been at the forefront of such acquisitions spending hundreds of millions of dollar in acquireing these developers.Most of these Project Developers have reaped a huge windfall as they had not constructed even 10% of their pipelines.The value given to these acquired companies was for their PPA,developement,environment permits,land acquisitions etc.

India’s Central Bank RBI had proposed to deregulate the savings rate on Bank Deposits as part of the Financial Reforms.Note Savings Rate is the only regulated interest rate in the Banking Sector.This has led to a huge windfall for Indian Banks.With a savings rate of around 3.5% and lending rates of 12%,Banks manage to reap profits from this huge spread in the rates which is commonly known as the “Net Interest Margin” or NIM.Indian NIMs are very high compared to that of other countries because of this discrepancy.Indian consumers are known to deposit most of their savings in Banks as Stocks and other Assets are considered untrustworthy.Banks with high proportion of their deposits in the form of these savings deposits have much higher profitability.Note RBI has increased the returns on the savings deposits recently by shortening the length of the cumulative returns.

Indian Banks don’t want competition in this space as they will lose the supernormal profits that they make because of this regulation.Private Banks are at the forefront of this opposition which is ironical as they should are the first in welcoming deregulation and competition

Maharashtra is one of the most industrialized states in India but it lags behind other states in Renewable Energy.The recent mandate by the Central Electricity Regulator to increase the requirement of Renewable Energy to 6% of Electricity Produced found Maharashtra having a severe shortfall.Maharashtra has the largest power capacity in the country with around 21 GW but most of it is thermal based generation.Despite having the second largest Wind Power Capacity with 2 GW which is around 42% of the state’s potential.However Maharashtra is still considerably short of the 6% Renewable Purchase Obligation (RPO) set by it.With CERC set to increase the Green Energy Target to 10% by 2015,Maharashtra needs not only to meet the shortfall but also to increase the share of Renewable Energy.

Recently Rare Earth Minerals Companies have seen sharply rising exports.Molycorp which came out with an IPO in the US markets has seen its stock price shooting up despite not producing commercial quantities.Other Australian and Canadian Companies have also seen steep increase in stock price.The Chinese Embargo should lead to further price appreciation as other countries focus on expanding supply and production of these minerals.The recent spat between Japan and China over a fishing boat incident has escalated in recent times with the top leadership in China taking issues.China’s relations with other countries have deteriorated in recent times with increasing trade friction with USA,Currency and Territorial Issues with Japan and growing Tension with India over border and land issues.

However Tecpro Systems differs from the other 2 IPOs in the sense that it is primarily focused on the Power Sector Space.It is a leader in the ash handling and material handling systems and is currently diversifying into becoming a turnkey provider in this segment.Like other infrastructure players it has seen amazing growth in the last 3 years at around 70%+.Its margins have come down and stabilized at around 7%.Cash Flow have been negative due the breakneck growth and the high WC requirements of the Construction Sector.The valuation does not seem expensive with the promoters diluting around 15% of the company.


This EPC company seems a good investment to me though not as good as VA Tech Wabag.The valuation at around 17x P/E is not very expensive though the sector concentration increase the risk for the company.However given the management quality,this company seems a better investment that other construction companies.The growth prospects of the Power Sector in India is huge and Tecpro seems well positioned in this space with partnerships with other major companies like Va Tech Wabag.Though there is some concentration risk,I think Tecpro seems a subscribe.

Not only Europe,even US is rapidly losing Green Jobs to Asia.Earlier Evergreen Solar had decided to shut down its US plant to set up a factory in China and Energy Conversion Devices is laying off workers to hire more in Mexico.The high costs of labor and capital have made it unfeasible for Western companies to manufacture in the Developed Nations.High Subsidies in the form of Low Interest Long Term Loans,Tax Holidays,Free Land have made the Asian countries irresistible to US companies.First Solar which is the largest manufacturer of panels in the world has most of its production in Malaysia where it enjoys a 15 year tax holiday.Chinese Company’s get massive subsidies from the government.This combined with extremely low worker and managerial salaries make western factories totally uncompetitive in a globalized world.REC which is one of the world’s biggest solar polysilicon and wafer producers has decided to shut down its module plant in Sweden.While the reason given is isolation from other factories,I suspect the costs are too high in expensive Sweden.Another European Solar Factory closes as Green Industry moves to Low Cost,Subsidy Rich Asia