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Solar stocks had an up and down week, but at the end of the day the industry trends are still getting stronger. Politically, solar is more acceptable than it was a year ago and the biggest, most ruthless banks in the world are seeing the value solar presents financially. Here are the biggest news items of the week from the solar industry.
Obama on energy
Renewable and solar energy has been on President Obama's agenda since he took office, but with a financial crisis, floundering economy, and war in Afghanistan to worry about, there's been little policy change. That's why Tuesday's speech about cutting carbon dioxide emissions and promoting renewable energy got so much attention from the solar industry. If President Obama is behind solar, it will get the political boost it needs.
As much attention as the speech got, I don't actually think it's all that important for investors. Solar installations grew 76% last year without much political help, and it's unlikely that a carbon tax or cap and trade will pass Congress in the near future.
Instead, investors should be focusing on changes at the state level and the falling cost of solar in the residential and commercial markets. New York, New Jersey, and Minnesota are just three states that have introduced policies in the past year that will grow solar, and they'll have more impact on the industry than what the president can get done right now.
Don't get me wrong. Having the president of the United States on your side is a good thing, I just don't think it fundamentally changes the investment case for solar.
Solar financing gets bigger
There were a couple of big announcements in solar financing this week. Sunrun said it has closed on $630 million worth of residential solar financing, backed by US Bancorp (NYSE: USB ) and JPMorgan Chase (NYSE: JPM ) . There's been a rush to solar by big banks this year, and this is just the latest investment they've made. US Bancorp has been investing in residential solar for years, but this is the first such investment by JPMorgan, an important shift for the company.
Clean Power Finance also announced an equity investment from Duke Energy, one of the biggest coal plant owners in the country. This is the second equity investment from a major utility and another sign that traditional energy is trying to get into solar.
Suntech is still alive ... sort of
The strange news of the week was another forbearance agreement on Suntech Power's (NASDAQOTH: STPFQ ) debt. The company will delay payment of $541 million of notes originally due in March until Aug. 30, the second extension of forbearance. It's unclear exactly how many bondholders agreed to the delay or what Suntech will do in the meantime, but it's supposedly working with creditors to keep the company alive.
What is clear is that investors shouldn't buy Suntech's stock. The company is in terrible shape financially, and the delays in payments to bondholders show that stakeholders won't bail the company out quickly. I think Suntech will eventually be bankrupt and equity investors will be left with nothing.
News and notes
Hanwha SolarOne (NASDAQ: HQCL ) announced another $100 million in financing this week, this time a term loan from the Export-Import Bank of Korea.
Canadian Solar (NASDAQ: CSIQ ) made a big splash this week by announcing a partnership with Samsung Renewable Energy to build manufacturing capacity in Canada. The venture will supply modules to at least 200 MW worth of projects Samsung is building and will probably grow that base in the future.
Slowly but surely, the solar industry is going mainstream, and this week saw a few steps in that direction.
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