Conergy AG, today issued a profit warning and dropped over 8%. Last month Conergy received a massive subsidy of EUR 76 million - or as they call it, funding. This would then lead to another subsidy from the German Federal State of Brandenburg.

From a pure economics perspective, I have very little confidence in Germany's solar boom. It's just that;

i) it is so government subsidy dependant
ii) Their solar firms appear quite unable to replicate their success outside of Germany
iii) Costs to the consumer are not falling post the introduction of the subsidy - a basis for its justification

Investors meanwhile are chasing a subsidy-driven industry of returns ultimately underwritten by government, rather than productivity.

One day - and I don't know when - these musical subsidies will stop. And Germany's solar industry will collapse as fast as alternative energy firms did following the demise of President Carter in the USA.