martes, abril 03, 2007

USA: Solar Demand Sparkles

The solar power market should continue to see robust growth, largely due to government incentives, declining production costs and the rising price of fossil fuels, according to a Monday report by Banc of America Securities.

"Although still a small part of worldwide energy production, solar...has enjoyed impressive growth since 2000," wrote Eric Brown, an analyst for Banc of America Securities, in a client note Monday.

Nonetheless, Brown said because the barriers to enter the solar market have diminished, investors should be "selective" as to which stocks to buy.

Indeed, manufacturers may eventually see prices and margins slide; China has emerged as a solar cell producer and thus increased the supply of polysilicon, which is used to make the cells.

Still, Brown said there are some good buys in the sector.

His top pick: SunPower (nasdaq: SPWR - news - people ), a San Jose, Calif.-based company that markets, manufactures and designs solar powered products and services.

"We favor...manufacturers that exhibit growth, scale, product differentiation, low cost production, low capital costs and vertical integration," he said.

Brown said that SunPower especially has a solid array of products and low capital costs.

He also has a "buy" rating on First Solar (nyse: FSLR - news - people ), a Phoenix, Ariz.-based solar module manufacturer that has "strong growth potential" and "low production costs," said Brown.

By the closing bell Tuesday, shares of SunPower were up 5.4%, or $2.30, to $45.12. Shares of First Solar fell 2.8%, or $1.57, to $55.44.


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