MADRID/FRANKFURT (Reuters) - The world"s No.1 wind energy generator and its fourth largest solar cell producer gave markedly different outlooks for 2010 on Tuesday, showing how the fortunes of solar and wind energy could diverge over the year.
While Germany"s Q-Cells avoided giving forecasts for 2010 due to uncertainty in solar markets, Spain"s Iberdrola said it expected operating profit to grow 20 percent in 2010, and forecast its installed capacity would grow to 16 gigawatts in 2012 from 10.7 GW in 2009.
Solar power faces incentive cuts in Germany, Italy and France along with competition from cheap Asian producers worldwide.
The European wind sector has not yet felt an impact from Asian imports and is receiving support from huge offshore windfarm programs and more stable regulation than solar.
PRICE STABILITY KEY
While Q-Cells is sold out of solar panels for the first half of 2010 it sees "unclear pricing dynamics" from July onwards. It could only say of 2010 that it aims to be profitable as prices remain so unpredictable.
"It"s hard to give a concrete outlook (for 2010) given the great uncertainty in the market," Q-Cells" chief executive, Anton Milner, said in a conference call for reporters.
Germany, the world"s largest solar market, plans to cut state-mandated incentives for rooftop solar installations by 16 percent from July 1 and eliminate support for solar plants on coverted farmland, according to parliamentary sources.
Expectations of those cuts has prompted solar developers to push forward projects to complete them ahead of the likely cuts, creating a boom in short-term demand, according to industry analysts.
The German cuts were agreed by a committee of the Christian Democrats and Free Democrats and are slated to be discussed by Cabinet on March 3. They must also be approved by the lower house of parliament.
"Subsidies will be with us for many years, but they are subject to change, and we are seeing that now," Jens Meyerhoff, the chief financial officer of First Solar, the world"s largest solar company, told a conference in New York on Tuesday.
Wind power remains a cheaper source of electricity than solar and is seeing rapid growth around the globe, although its share of power generating capacity is small compared to coal-fired generation and nuclear power.
Renovables has power purchasing agreements giving it fixed prices for many of its U.S. windfarms which, together with its agreement to sell power to its parent Iberdrola at above average prices, supports its defensive profile.
Stable regulation and long-term supply contracts in the United States has enabled Renovables to sell 90 percent of its 2010 generation in advance at fixed prices, boosting its defensive profile.
Q-cells posted a 2009 net loss of 1.356 billion euros ($1.85 billion), missing forecasts for 986 million euros from a Reuters poll, due to heavy writedowns and plummeting component prices.
Iberdrola Renovables 2009 net profit fell 5 percent to 371 million euros, narrowing from a 27 percent drop at the nine months stage and in line with company forecasts for a slightly lower bottom line and double digit growth in EBIT.
(Reporting by Jonathan Gleave in Madrid and Christoph Steitz and Peter Dinkloh in Frankfurt. Additional reporting by Erik Kirschbaum in Berln and Matt Daily in New York; Editing by Jon Loades-Carter, Leslie Gevirtz)
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