Solar Parity in California, Hawaii, Japan and Other Selected Markets Supports Alternative Energy Market for 2014: A Wall Street Transcript Interview with Angelo Zino, Renewable Energy Analyst at S&P Capital IQ Equity Research

Wall Street Transcript

67 WALL STREET, New York - February 14, 2014 - The Wall Street Transcript has just published its Alternative Energy & Utilities Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Outlook for Biofuels and Biochemicals - Asia Pacific Demand for Solar Energy - Grid Parity Timelines for Alternative Energy - Solar Energy Pricing - Government Subsidies and Regulation - Solar Growth Drivers and Headwinds - Regulatory Headwinds for U.S. Utilities

Companies include: Trina Solar Ltd. (TSL), LDK Solar Co.Ltd. (LDK), First Solar, Inc. (FSLR), JA Solar Holdings Co., Ltd. (JASO), Advanced Energy Industries, In (AEIS) and many others.

In the following excerpt from the Alternative Energy & Utilities Report, an expert analyst discusses the outlook for the sector for investors:

TWST: How have supply/demand dynamics shifted for the solar sector, and how do you expect supply and demand to trend this year?

Mr. Zino: I actually think that the best thing to do is first go back to 2011-2012, when there was a severe oversupply situation and we saw selling prices drop as much as 70% across certain areas of the supply chain. That was a period when we saw a number of solar manufacturers exit the industry.

If you then move into 2013, that's really when we think the inflection occurred for the solar industry, when fundamentals started to improve and demand started to come back; we saw Europe start to take a smaller chunk of the market following significant subsidy reductions, and as a result the survivors heading into 2013 were able to prosper. Some actually returned to profitability during the second half of the year. In 2014, we expect the momentum to continue, and we remain positive on the solar space as we see further stabilization in prices and we see further demand improvement being led by the Asia Pacific region as well as the U.S.

TWST: In what regions do you expect solar to achieve grid parity this year, and which companies might be beneficiaries?

Mr. Zino: If you look at the solar industry, there have always been lots of talks about grid parity, and really that elusive grid parity term is one that is extremely subjective. I guess grid parity to us is viewed as being able to get your payback period on purchasing these solar panels to five years or less, a point where we think it makes it a very viable investment and attractive enough to stimulate growth in those regions.

So if you start looking at certain areas in the U.S., we think that you're already there, many areas in the Southwest and some areas of California is another, where you've got very attractive local subsidies to go with the 30% federal tax credit. High electricity costs and significant sunlight in Hawaii makes this state another good example.

Other regions of the world near grid parity levels are where they have attractive incentives, with high levels of sunlight as well as a high cost of electricity, a combination of all those factors. If you are looking at an area like Japan, it's extremely attractive to buy a solar system, and demand there has really taken off over the last couple of quarters. But yes, I mean we're starting to see spots here and there, but we still have a long ways to go.

TWST: Can you talk about the difference between the solar industry in the U.S. and the solar industry in China? And which do you want to be exposed to in 2014?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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