The race to grid parity, one week at a time.

On Monday, Yingli Green Energy (NYSE: YGE) caught a downgrade from Macquarie analysts, after the firm started making polysilicon in-house. This was previously the only missing link in Yingli’s vertically integrated manufacturing process, which the company filled by acquiring start-up Fine Silicon in early 2009.

Yingli expects to start commercial production sometime in the first half of this year. Unfortunately, ramping up this sort of operation can be tricky. Any bumps in the road could pressure Yingli’s cost structure relative to competitors like Trina Solar (NYSE: TSL), which made the critical decision not to go down this road several years ago.

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