Raymond James Alternative Energy Analyst Molchanov (Pt. 1 of 2) – Why Solar Stocks May Soon Be ‘Off to the Races’
Submitted by New Energy News Blog
It’s been a bad year so far for solar company stocks but “We’re off to the races” if two things happen by the end of 2008, Pavel Molchanov, alternative energy analyst for investment bankers Raymond James & Associates, told EnergyTechStocks.com.
Molchanov said he’s optimistic about one, uncertain about the other. He added that his personal favorites in the solar sector are SunPower Corp. and JA Solar Holdings Ltd., both of which trade on NASDAQ.
One thing Molchanov says needs to happen for solar stocks to get back their shine is for the U.S. Congress to pass an extension of the federal government’s investment tax credit for solar projects, currently scheduled to expire on Dec. 31. If that doesn’t happen, Molchanov said he’s worried about how long it may take a new president and Congress to get around to it, and how the delay will impact solar development in the U.S.
While Molchanov is uncertain about Congress, he’s optimistic that Spain will extend financial incentives for solar development, albeit with an annual cap on the number of megawatts (MW) that qualify. He said that the market is expecting a 300 MW cap but that he’s optimistic about it being 500 MW, which would be bullish for solar stocks. He added that even if Spain applies the lower cap, he’s confident that reduced Spanish demand can be made up by pent-up demand in other European countries including France and Italy.
Molchanov said he likes SunPower because it is the industry leader in systems integration and because it consistently beats its quarterly earnings estimates. Earlier this month, SunPower announced it would be participating in a giant 800 MW project being undertaken by Pacific Gas & Electric Corp. The company’s stock rose sharply on the news and has held the gain.
Molchanov said he likes JA Solar in part because of its strategic alliance with China’s Jinglong Group, which should keep the company amply supplied with the silicon it will need to exploit the still rapidly growing solar market in China and elsewhere in the world.
