North Coast Solar Stocks

July 27, 2009

Rising U.S. solar demand faces financing issues

Filed under: AKNS, FSLR, RSOL, SPWR, STP, YGE — Tags: , , , , — Jason @ 2:28 pm

7/27/2009 2:28:40 PM

BOULDER, COLO.: The appetite for solar projects in the United States has lagged market leaders like Germany and Spain, however increased federal and state subsidies have begun to take effect and demand for solar in certain markets like New Jersey and California is heating up, according to a new report from Pike Research.

Pike forecasts that the U.S. solar market will surpass Spain in 2009 and will top Germany by 2013. However, the firm points out that financing for solar projects remains elusive.

The weak supply of tax equity combined with heightened credit requirements has led to numerous project cancellations and delays nationwide, with over 75 MW, totaling $450 million, of idle projects in New Jersey alone, according to industry analyst George Kotzias. Kotzias said, “But the tide is beginning to turn as evidenced by Wells Fargo (WFC) and U.S. Bancorp (USB), both of which have established tax equity funds for solar projects.”

In Pike’s analysis, solar companies that stand to benefit most from a U.S. boom include First Solar (FSLR), SunPower (SPWRA, SPWRB), Suntech (STP), Yingli (YGE), Akeena (AKNS) and Real Goods Solar (RSOL).

“As soon as financing picks up, the demand is there,” Kotzias said. “In addition to the increase in subsidies, module prices have dropped by as much as 50 percent and installed costs have dropped over 30 percent over the past year.”

The Pike study notes that this combination of drivers has attracted the market entry of established developers from Europe as well as many domestic start-ups.

Pike Research is a market research and consulting firm that provides analysis of global clean technology markets.

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