Solar power fails to help Philip Lynch
Published 21/07/2011 | 05:00
A technology that was first applied in the Mojave Desert in California was always going to have a touch of the frontier about it. But solar power was, up until a few years ago, expected to follow in the footsteps of wind and start to get the backing of men in sober suits.
However, it is proving difficult for the technology to really enter the boring mainstream and this is bad news for NTR Plc, one of its chief Irish sponsors; and for Philip Lynch's old company, One51, which took a whopper of a writedown on its NTR shareholding this week.
The reason for the decline is not really an issue with the technology, but more a problem of generous subsidies to the industry being cut back all over the world. Either way it appears to be weighing down the NTR share price, which this week was hovering near very disappointing lows of 50c a share (a grey market price).
Only two years ago, Lynch's One51 thought a fair value for NTR shares was €3.71 per unit; but by the end of 2010, the company's valuers were happier with a far more modest €1 per share. This has forced One51 to do a downward adjustment to the value of the stake of an eye-watering €132m.
With NTR shares scraping along the floor, Lynch's gamble on solar energy looks like being a hard one to feel cheerful about.
For NTR, the solar investments are a long-term play on a semi-embryonic industry; but the pay-off, if it comes, will arrive too late to save Lynch's job.