Solar Modules are as cheap as they have ever been. Solco should be able to source high quality modules @ $US2.50 per watt. Same time last year solar modules were being sold by manufactures over $US4.00 per watt.
Also a stronger AUD will also help Solco execute larger margins.
Peter Garret said their are over 60,000 systems 1KW systems which are in backlog for the solar $8,000 rebate. That equates to over 60MW. No doubt Solco should have atleast over 5% market share. That equals over 3MW or 3,000 1KW systems. Worse case they should sell each system @ $8,000 each = $24M in revenues already in the next financail year. The above is just my assumptions but could be alot higher, if it is less it should be by much.
Investors might think oh no, no more $8,000 rebate. Not to worry. Solar Recs will come into play. a 1.5KW system sold in sydney based on prices todays solar rec prices, you wouls get back $7,500. My understanding is for the $8,000 rebate you have to wait 6 weeks. WIth the solar Recs you get your money back as soon as you sell the solar recs.
IMO demand should maintain or increase with the new Solar Recs subsidy. As it is not capped, which means all australian hoseholds are entitled to it. I myself will be installing a 3KW system on my roof.. However for the addtiuonal 1.5KW I will not receive less Solar recs Vs the 1st 1.5KW.
So things look very good for Solco for the next 12 months.
GOE Price at posting:
6.2¢ Sentiment: LT Buy Disclosure: Held
