S.A.G. Solarstrom AG, a German developer of solar-power plants, may buy inverters in China to offset falling margins from European anti-dumping duties that have made Chinese cells and modules more expensive.Solarstrom, which has sourced its inverters in Europe from producers including SMA Solar Technology AG, is looking at alternative suppliers including China's Sungrow Power Supply Co., Chief Executive Officer Karl Kuhlmann said today in a phone interview. The Freiburg-based company may also purchase modules in India and Korea, he said, adding that he expects a “revival” for thin-film panels.

Eoin Treacy's view In order to connect solar panels to the electricity grid an inverter is an indispensible piece of equipment. Therefore, related shares offer a high beta avenue for participating in the build-out of solar capacity. Just as most solar companies crashed in 2011 and 2012, giving up their entire bull market gains, inverter companies fell even harder. From January this year solar panel companies have turned to outperformance and an increasing number are breaking medium-term progressions of lower rally highs. Solar inverter companies are following suit.

German listed SMA Solar Technology bottomed in November near €15, ranged above €17 from February and pushed back above the 200-day MA for the first time since 2010 in May. It has been consolidating in the region of the 200-day MA for the last couple of weeks but a sustained move below €21 would be required to question medium-term recovery potential.

Among the leading solar panel producers Trina Solar, First Solar, Canadian Solar and JA Solar Holdings all paused over the last few weeks in at least a partial reversion towards the mean. Sustained moves below their respective 200-day MAs would be required to question medium-term scope for additional upside.

LDK Solar has returned to test the region of the 200-day MA and recovery potential can continue to be given the benefit of the doubt provided it continues to hold above the $1.30 area.

Hanwha SolarOne is the result of a merger between Korean Hanwha and Chinese SolarFun. The share broke out of an almost yearlong base in late May and continues to consolidate in the upper region. A sustained move below the trend mean would be required to question medium-term recovery potential. China Sunergy and ReneSolar have broadly similar bases but have not yet broken out.

Suntech Power has unwound its deeply oversold condition to test the region of the 200-day MA. A break in the six-week progression of higher reaction lows would be required to question medium-term demand dominance.