Wednesday, March 16, 2011

Solar stocks rise for a second day on nuclear power worries fed by disaster in Japan


By: The Associated Press

DES MOINES, Iowa (AP) - Stocks of solar power providers climbed for a second day Tuesday as the situation at a damaged nuclear power plant in Japan worsened, causing investors to gravitate toward companies that make solar panels and other related equipment.

SunPower Corp. rose $1.52, or 10.5 percent, to $16.02. The San Jose, Calif., company makes solar cells, panels and inverters.

Canadian Solar Inc. rose 90 cents, or 8.4 percent, to $11.65.

And Suntech Power Holdings Co., a Chinese manufacturer of solar products, rose 64 cents, or 7.7 percent, to $8.92.

The spike was particularly noticeable on a day that stocks generally tumbled on uneasiness over the impact of explosions and the release of dangerous levels of radiation at Japan's Fukushima Daiichi nuclear power plant.

The Dow Jones Industrial Average was down 200 points, or 1.7 percent at midday, while the S&P 500 slid 21 points or 1.6 percent.
Kaufman Bros. analyst Jeffrey Bencik said in a note to investors that the earthquake in Japan will have an impact on the solar industry in both the short and longer term.

The immediate impact is a reduction in supply of polysilicon, solar wafers, cells and modules from Japanese manufacturers that have been idled by the earthquake. Japanese production amounts to around 10 percent of total solar production.

"Therefore, we believe the companies that will benefit the most from the recent quake are solar companies that manufacture polysilicon outside of Japan, or those who have secured their supplies of polysilicon at long-term contract pricing," he wrote.

With the idling of the nuclear power plant and its six nuclear reactors, Japan may turn to solar power for additional generation since it's easy to install, Bencik said.

The events in Japan are likely to delay new nuclear plant construction in other countries, he said. That, along with the lengthy permitting periods for new coal plants, leads Bencik to theorize that solar power may be the most likely beneficiary of the disaster.

Coal and nuclear plants generate about 70 percent of total electricity globally, he said.

Stock of other solar energy companies rose Tuesday.

Shares of JA Solar Holdings Co. Ltd. rose 46 cents, or 6.9 percent, to $7.15. The Shanghai, China, company makes solar energy products including solar cells.

Shares of Yingli Green Energy Holding Co., also based in China, rose 87 cents, or 7.7 percent, to $12.13. It makes photovoltaic modules for several countries including Germany, Spain, Greece, France, and the United States.

First Solar Inc. shares rose $8.11, or 5.5 percent, to $155.02 and LDK Solar Co. rose 88 cents, or 7.6 percent, to $12.46.

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