Is China’s solar industry hot or not?

CRISTINA QUICLER/AFP

Today was another big day for the booming Chinese solar industry. Shares of LDK, a solar wafer manufacturer based in China, went on sale today on the New York Stock Exchange. The IPO did somewhat better than expected, with shares going for as high as $30 in a flurry of heavy trading. Another highly anticipated IPO, for Yingli Green Energy, is likely to happen later this month. It’ll be (at least) the sixth Chinese solar company to raise capital in the U.S. stock markets. 

There’s actually a bit of a debate among stock market analysts, however, on just how viable the Chinese solar industry really is. Those bearish on solar point to a worldwide shortage of high-grade polysilicon, which has weakened demand by keeping prices high for several years now. And earlier this week, SolarFun Power, another Chinese solar manufacturer, posted disappointing first-quarter earnings. That put a damper on some investors’ enthusiasm for Chinese solar manufacturers, but apparently not enough to ruin LDK’s day in the sun.

LDK boosters point out that the company has already amassed a reasonable quantity of polysilicon, and that its fundamentals are solid. Couple that with China’s low labor costs,  burgeoning engineering prowess, enormous energy needs, and its environmental crises, and you’ve got a potential winner to follow other Chinese solar success stories like China SunEnergy. This is definitely a sector to watch.