Sector Wrap: Analyst upbeat on solar companies

Shares of several solar power companies mostly rose with the broader market Thursday as a Cowen & Co. analyst set an "Outperform" rating for some companies in the sector and said worries about declining module average selling prices have been overstated.

"We expect end market diversification, enhanced U.S. subsidies, rapid growth in Italy and France, and emergence of new regions such as the Middle East," Robert W. Stone said in a report issued Thursday.

Stone said he expects module average selling price declines of 10 percent to 15 percent in 2009 and that supply and demand for global photovoltaics should be balanced.

The report said demand is expected to grow from 6 gigawatts in 2008 to 14 gigawatts in 2010. Stone said he assumed an increased Democratic majority in Congress that will pass a multiyear investment tax credit with higher residential credits and utility participation. State programs also will become important.

"Lower prices and improved supply should drive German expansion and renewed Japanese growth. Italy appears close to grid parity, while Middle Eastern countries could deploy PV to preserve valuable hydrocarbons for export," he said.

Stone gave an "Outperform" rating to SunPower Corp.; Evergreen Solar Inc.; First Solar Inc.; SunTech Power Holdings Co.; Trina Solar; Hoku Scientific Inc.; China Sunergy Co.; and Energy Conversion Devices.

SunPower shares rose $3.52, or 3.8 percent, to close at $96.96, while Evergreen Solar added 17 cents to $9.48. SunTech Power climbed $1.29, or 2.9 percent, to $46.50, and Trina Solar rose 73 cents, or 2.3 percent, to $32.45.

Hoku shares lost a penny to end at $5.95. Also finishing down a penny was China Sunergy, at $11.37.

Energy Conversion Devices lost $1.79, or 2.3 percent, to $76.55 after the company announced its fiscal fourth-quarter results.