Published on February 2nd, 2015 | by Jake Richardson3
Trina Solar Hunts For Affordable Acquisitions
February 2nd, 2015 by Jake Richardson
Everyone knows the price of oil has dropped recently, and it is only reasonable that many people are happy about that. Some have speculated that the surging interest in solar and wind power will wane, but this notion seems a little dubious because renewable energy growth has been a steady, long-term trend. Oil prices have their own cycle and tend to be more episodic. Furthermore, renewable energy growth has de-linked from oil price changes.
Perceptions do influence the stock market, however, so now might be a good time for investing in some solar stocks… or for a very large solar company like Trina Solar to shop around for some solar power acquisitions.
“Acquisition is a good way to expand quickly at low costs. We are looking at various opportunities both domestically and abroad, including ones in North America,” explained Trina Solar CEO Gao Jifan.
Of course, this perspective makes sense… who would not pluck low-hanging ripe fruit at artificially low costs? Gao Jifan said he doesn’t see a rational connection between the oil price drop and slumping solar company shares. Who does?
Trina Solar could simply acquire its way to a better strategic position, rather than building up entirely on its own. Trina is one of the largest solar panel manufacturers in the world and grew panel production 35% last year. In fact, it may well be the largest, as some have estimated that it passed up Yingli Solar in 2014.
Though it may seem that, when oil prices are down, some people will forget about solar power, this is mostly not true. The motivation for buying and installing solar power is not only about the lowest cost. Factors such as protecting the environment and reducing air pollution to improve human health are in play. Also, the amount of oil that is spilled in the environment due to the huge spills is not something most people are fond of. The millions of small oil spills don’t get any press but they add up to enormous damage as well. And there are also the “oil wars” and desire for energy independence.
Then there is the big daddy: growing awareness of human-made climate change.
So, oil and solar power are not forms of energy that can only be compared on a monetary level. Their costs are only a portion of the economic, energy, and environmental picture. It seems absurd that everyone knows about the drop in oil prices, but relatively few may be aware of how much the cost of solar has fallen.