China Sunergy goes public as solar panels get cheaper

In solar, has the race to the bottom begun?

China Sunergy, a solar cell manufacturer out of Nanjing, sold 8.5 million depositary shares (the vehicle foreign companies use to list their stocks in U.S. exchanges) on Nasdaq this week. The stock went out at $11, shot up to about $16, and is now resting between $14 and $15.

The rippling in the stock price could partly be reflecting a trend some are worried about in the solar world. As more manufacturers jump in the market, the prices for conventional solar cells will decline. The question is how much. A number of Chinese solar companies have held public offerings in the U.S. in the past three years and are using their capital to expand plant capacity. In a note in April, ThinkEquity Partners analyst Dave Edwards spoke with a number of Chinese solar companies and concluded that price declines were likely as these companies chased market share.

Suntech Power Holdings, a Chinese solar manufacturer that held a U.S. IPO in 2005, announces earnings next week.

Meanwhile, Applied Materials is helping start-ups enter the field by selling turnkey manufacturing lines to them.

On the other hand, companies like First Solar, which relies on different materials to make solar panels, and SunPower, which makes high performance panels and cells, are seeing revenues climb.