Unfortunately, the shakeout that I theorized would happen in the solar field is appearing to happen much earlier than I anticipated (Jan 3: The Long Term in Solar) due to credit crunch and global economic slowdown/recession. A lot of failures and consolidation should occur - keep in mind for every 1 Chinese solar stock trading on an exchange, about 9 (last I checked) are private in either Hong Kong or China. With capital intensive process and capital intensive needs of customer for projects it's not the greatest of times as BusinessWeek points out. Looking at the stocks, they have simply not reacted at all in this rally except for 1-2 days, and most charts look poor despite probably the best candidate to make their case, outside of Al Gore to make to ascend to the Presidency.

I still expect Obama pops in 2009 as energy policy initiatives are announced (and you know how the lemmings in this market react to "thesis") but unfortunately a lot of solar investing in the next few quarters will be on hopes - the headwinds look quite tremendous. I'm actually quite bullish on the macro sector as a growth industry (still), but the individual companies face serious challenges. The next 4-6 quarters should be very interesting. With potentially new technologies coming online 3+ years out the intersection of timelines will also be interesting.

We still have 3 names in smaller positions, all of which I was hoping to exit on any Obama pop - so far Midas has not touched these stocks.

• If the recent five-year boom in solar energy marked the birth of a global industry, the next half-decade should be its coming of age. But like most adolescents, solar is experiencing growing pains. The economic crisis has weakened demand for everything from polysilicon to rooftop panels, just as manufacturers have spent billions expanding production. The overcapacity has caused prices to plummet and left the industry financially exposed. A number of companies—especially startups—may not survive a shakeout that could last 18 months or longer.
• The causes of the downturn are complex and interrelated. As the price of oil plunged from its peak last summer, solar and other forms of renewable energy became relatively less cost-competitive—dampening demand from industrial, commercial, and residential customers. At the same time, the credit squeeze has made it harder for customers, whether power companies or energy-conscious homeowners, to finance solar projects. Some also are holding back in anticipation that solar equipment prices will fall even further.
• Consider the story of Peng Xiaofeng, chairman of China's LDK Solar (LDK), a maker of solar wafers. During a recent trip to Europe, he toured major solar projects that have been, in some cases, on the drawing boards for two to three years. "They're all delayed," Peng says."I don't think they'll be ready (even) in 2010 or 2011."
• After increasing at roughly 50% annually every year since 2004, the overall market for new solar installations could slow to just 15% growth in 2009, according to analyst estimates.