Solar Stock Update: Upbeat

17 out of 20 are up!

The first week of February was favorable to 17 of the 20 solar stocks in this index. A couple of reasons could account for this. Projects planned last year but were postponed until the federal solar tax credit was renewed are now completing contracts. Also, investors might be encouraged from what appears a strong possibility the economic stimulus now being finalized by the Senate includes a 30% cash grant option in lieu of the 30% solar tax credit now in effect. With fewer tax-equity investors (and business owners with lower tax liabilities due to a down economy) the cash grant could jump-start solar projects that otherwise would not make financial sense (see previous post below). We'll know for sure any time now.

Of course, these gains could disappear in a day next week but any good news is worth savoring this winter.

Week of: February 2-6, 2009

Symbol/Name Monday Friday +/- % Change

DJIA/Dow Jones 7936.75 8280.59 +343.84 +4.33%

NASDAQ 1494.43 1591.71 +97.28 +6.50%

Akeena Solar AKNS 1.92 1.79 -.13 -6.78%

Amtel Systems ASYS 4.07 4.22 +.15 +3.68

Applied Mat. AMAT 9.41 10.45 +1.04 +11.05%

Canadian Solar CSIQ 5.06 5.34 +.28 +5.53

ECD (UniSolar) ENER 23.96 25.73 +1.77 +7.38%

Entech (WW) ENSL.OB .365 .38 +.015 +4.10%

Evergreen Solr ESLR 2.07 1.91 -.16 +7.73%

First Solar FSLR 138.27 146.30 +8.03 +5.80%

GT Solar Int. SOLR 3.34 5.27 +1.93 +57.78%

JA Solar JASO 2.48 2.77 +.29 +11.69%

Kyocera KYO 64.92 69.08 +4.16 +6.40%

LDK Solar LDK 11.25 10.63 -.62 +5.52%

MEMC Elect. WFR 13.04 15.54 +2.50 +19.17%

Renesola SOL 3.52 3.83 +.31 +8.80%

Satcon SATC 1.35 1.32 -.03 -2.23%

SolarFun SOLF 4.64 4.86 +.22 +4.74%

SunPower SPWRA 31.88 35.64 +3.76 +11.79%

SunTech STP 8.96 9.90 +.94 +10.49%

Trina Solar TSL 7.74 7.74 0 0

Yingli YGE 4.99 5.79 +.80 +16.03

Average % change for all solar stocks this week: +9.09%

NOTE: All above stocks have market capitization of $100M+ except Akeena Solar, Amtel Systems and Entech Solar. This listing is strictly informational and implies neither endorsement or disapproval of any stock listed. Comments and suggestions are always welcome.

Stimulus: 30% Solar Tax Credit or Cash Grant?

The U.S. Senate's version of the stimulus package includes a new grant plan enabling renewable energy producers to take a 30% cash grant from the U.S. Treasury in lieu of the 30% investment tax credit currently in effect. The proposal, presented by Sen. Jeff Bingaman (D-NM), aims at addressing the precarious position of the tax equity market. Expectations for a refundable ITC had been very low in the Senate's version but now, as both the Senate and House stimulus bills include this investment option, the likelihood of inclusion in the final bill looks good.

As a result of the current economic situation, the availability of tax-equity investors for solar and other renewable energy projects has dropped considerably. Some three-quarters of companies involved in tax-equity investing (power purchase agreement investor groups) are no longer contracting such deals.

"The squeeze in the tax equity market threatens to severely slow down the construction of new facilities for renewables. I strongly support the Senate package which would enable firms to carry back their tax credits for five years. But I also would support doing more, as long as we protect the American taxpayer," said Sen. Bingaman who chairs the Energy & Natural Resources Committee and is a senior member of the Finance Committee.

"This grant proposal threads the needle by offering an opportunity for developers to monetize the production and investment tax credits but does so in a commonsense way. Of course, no one is forced to accept a grant under the proposal; any project developer can still choose to get the traditional PTC or ITC route," said Bingaman.

The senator developed his approach after consultation with numerous renewable energy developers and financiers. Industry members have praised it as a workable solution. Utility-scale solar developers can also benefit from Bingaman's version because their longer build-out schedules, such projects were basically left out of the House provision.

The Obama Administration is still hoping for Congress to be finished with the stimulus bill by mid-month, a daunting task for the next ten days.

(This story is a summary derived from articles in the Feb. 4, 2009 Futures and Commodity Market News and the PV Tech Newsletter.)