Canaccord Sees Possible PV Feed-In Tariff Modestly Positive for American Solar Companies (FSLR, SPWRA)

An analyst at Canaccord Adams issued a research note this morning considering the possible impacts that the US's first ever PV feed-in tariff could have on American solar companies. The report follows news that the Board of Directors of a Florida utilities company, Gainesville Regional Utilities, recently approved such a tariff. According to the analyst, if the initiative is approved by the Florida Public Service commission -- while only a relatively small program -- it would serve as a "litmus test" for the entire industry.

Specifically, the program would offer a fixed rate of $0.32 per kilowatt hour for 20 years. The analyst believes the tariff would directly benefit American solar companies such as First Solar (Nasdaq: FSLR) and SunPower (Nasdaq: SPWRA). The firm said, "If the program stimulates growth without overburdening the ratepayers/taxpayers, there exists a possibility that other utilities across the country may begin to
follow suit - especially because we do not see the pending federal stimulus legislation fueling significant adoption or providing enough incentive to supply the growth needed to meet looming RPS requirements by itself."

Canaccord maintains its its Buy rating an d $213 price target on First Solar, but does not cover shares of SunPower. With shares of First Solar trading around $151.50 today (up 1.7%), the firm's price target represents potential price appreciation of about 40%.

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