Solar has become an impossible business—even if you are the largest independent producer of solar cells in the world—if you can’t get costs under control.
Q Cells (QCLSF.PK) is the midst of layoffs, write downs, and asset sales that are intended to fix what is now an uncompetitive cost structure.
Unfortunately, I don’t see the steps the company has taken so far as being enough to fix the problem and I’m afraid that by the time it does, Q Cells will have lost significant market share to companies such as Suntech Power Holdings (STP) that are currently badly undercutting Q Cells on price. In the third quarter for example, Q Cells saw an average selling price of 1.11 Euros per watt. Suntech Power and other Chinese solar companies are selling their cells at 0.80 to 0.90 Euros per watt.
As of January 5, 2010, I’m selling these shares out of my long-term Jubak Picks 50 portfolio.