Tuesday, August 30, 2011

Maybe this is why A Gore is spinning out.

"BYD plans to cut its sales force by about 70%, a Chinese website and other news sources said, after the company reported a nearly 90% drop in first-half profits."

BYD wasn't on my radar until a couple of weeks ago. They are a Chinese battery and car maker. Focus on Hybrids.

It was right after Evergreen Solar went bankrupt, this company popped up on the news feed. When alternative energy companies start posting 90% drops in profit - it gets my attention. Also when they fire 2/3d's of their sales staff.

The interesting thing I found about EverGreen Solar is that no one popped up to buy it's assets before they filed bankruptcy. That is a definite change from the past two years. Before there was a ton of "consolidation". I have yet to see anyone saying the bubble is almost fully popped. Still, like Greece - it doesn't have long.

First Solar - arguably one of the bigger alternative energy companies has fallen from 285 bucks a share in late 2008 to 101 bucks a share today. That is a huge hair cut. If the stock market takes another downturn, these companies will be fully starved of capitol. Wind companies are now in the cross hairs.

I expect a full cleansing to start in 2012. Many of these companies have been taking losses for at least four quarters. Some have never turned a profit. This is not the time in history to be an XM radio type of company that never turns a profit.

Update: I was working on this post this morning. I couldn't really get it to gel together. Now that Crazy Uncle Joe came out to tell me the Bad Economy Is Right Time to Invest in Clean Energy - I am more convinced than ever the end is near.

I mean, everyone who took out loans to put panels on their house has a good chance of default. Yes, everyone. Especially those government schemes where they front you the money and you pay via a property tax supplements. With a lien attached to your house.

Even if you are not underwater, say break even - it honestly will take you at least a decade to start breaking even on the cost of installing panels. In a market that is not declining, you might decide to pay for your power in advance. Which is essentially what you are doing. Most of these people will never see a return on investment.

Additionally, the claim is these things will last 30 years. I completely call bullshit on that. I have yet to see anything that has sat in the sun for five years not start to degrade. The sun especially beats the shit out of everything in it's path.

P.S. The title holder of this post keeps inviting Mr S. to a "thing". I don't know why. He is completely out of his demo. I kinda want to go though. I will ride the train for a little while. I have resisted though, because I don't want to be on that mailing list.

2 comments:

purplemagpiesnest said...

1) How on Earth did Mr. S. get on a mailing list from the Internet Inventor???

2) Biden is a Bonehead. With a capital B. 'Nuff said.

3) Basically, I don't get economics, at all (I'd rather watch paint dry, I think, than try to understand the ins and outs). It's, like, Greek to me (or Chinese). Ha. Haha. :P But I think it's interesting that Evergreen Solar partially blames competition from the Chinese for its demise.

she said: said...

I don't know! They invited him twice.

The good news is most economists don't really know that much about economics.