STD, Suntech Power Holdings Co Ltd. and how to create a 10+% GIC in Canada.

STP 2013

These guys are flirting with bankruptcy, unique for a Chinese company. We are not sure how to count this but we are sure that it does not matter, not after you drop from $90 to 60 cents on the ADRs. FSLR has had equally dramatic move, see elsewhere in this blog. What happened? Did the stop shining?? No. Governments around the World wanted to be “green” so they decided to rig the market such that something that was not at all economical, becomes very economical (for some, as the laws of physics cannot be changed). Then they threw “local content” into the equation and voilà a big expansion of manufacturing was stimulated into existence. Then they, the governments, rather abruptly recognized their follies and cut their subsidies, that is the price at which they are willing to buy your electricity, the so called feed-in rate. That is why, or at least one reason why some of these companies are in trouble.

In Canada we have the Micro-fit programme. Micro because it is for the little guy with about $50,000 max to invest, and fit for feed-in-tariff. Google micro-fit and you will get tons of information. You need a rooftop that is of a certain size and facing the for a good part of the day. The tariff is now 54.9 cents per kilowatt-hour down from about 84 cents in the beginning, but the costs have come down equally fast. A 5KW system can now be bought for $25,000 including HST and fees for connecting and permits. This would generate about $3,400. per year but that degrades by about 1/2 to 1 % per year, which should work out to a yield of about 10% per annum or better, good for 20 years, government (Ontario Power Authority) guaranteed.  Here is one of the better companies in this business;

esolar website

They are happy because what they lose on a bank deposit they make up on their Micro-fit installation. Unfortunately you can only go to about $50,000 now.