Treasury Renewable Energy Cash Grants Boosts Solar Stocks (TAN, JASO, LDK, STP, SPWRA)
Besides a much needed relief rally, the run-up in solar stocks today is likely realted to news the U.S. will provide renewable projects with cash grants in lieu of the 30% investment tax credit.
Today, the U.S. Treasury and U.S. Department of Energy announced an estimated $3 billion for the development of renewable energy projects around the country and made available the guidance businesses will need to submit a successful application. The govenment program, funded through the American Recovery and Reinvestment Act, will provide direct payments in lieu of tax credits in support of an estimated 5,000 bio-mass, solar, wind, and other types of renewable energy production facilities.
The Recovery Act authorized Treasury to make direct payments to companies that create and place in service renewable energy facilities beginning January 1, 2009. Previously, these companies could file for a tax credit to cover a portion of the renewable energy project’s cost; under the new program, applicants would agree to forgo tax credits down the line in favor of an immediate reimbursement of a portion of the property expense. This direct payment program allows for an immediate stimulus in local economies.
A number of solar names are seeing interest today:
The broad sector is up 3.7% currently, as represented by the ETF Claymore/MAC Global Solar Energy (NYSE: TAN). The other sector ETF Market Vectors Solar Energy ETF (NYSE: KWT) is up 4.3%.
- JA Solar Holdings Co., Ltd. (Nasdaq: JASO) +9%
- Yingli Green Energy Holding Co. Ltd. (NYSE: YGE) +6%
- Trina Solar Ltd. (NYSE: TSL) +5%
- ReneSola Ltd. (NYSE: SOL) +5%
- LDK Solar Co.Ltd. (NYSE: LDK) +6%
- Canadian Solar Inc. (Nasdaq: CSIQ) +6%
- Solarfun Power Holdings Co. Ltd. (Nasdaq: SOLF) +3.5%
- Suntech Power Holdings Co. Ltd. (NYSE: STP) +4%
- Evergreen Solar Inc. (Nasdaq: ESLR) +2%
- First Solar, Inc. (Nasdaq: FSLR) -1%
- MEMC Electronic Materials Inc. (NYSE: WFR) +2%
- SunPower Corporation (Nasdaq: SPWRA) +2%
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