China has launched an unprecedented and long-awaited plan to offer subsidies for utility-scale solar power projects, sparking a rally in shares of Chinese solar panel makers on Tuesday.
Shares of top Chinese panel maker Suntech Power Holdings soared 10 percent, Yingli Green Energy Holding climbed 14 percent, Trina Solar rose 10 percent and JA Solar Holdings was trading 7 percent higher.
Beijing's bid to boost the solar energy sector could draw more than $10 billion in private funding for projects and put China on track to become a leading market for solar equipment in the next three years.
As the world's top greenhouse gas polluter, China is trying to catch up in a global race to find alternatives to fossil fuels, blamed for carbon emissions affecting the planet's climate.
Expectations of such a move by China have underpinned a rally in Chinese solar stocks for much of this year.
Several analysts warned on Tuesday, however, that the subsidy program, although positive, would not lead to a near-term pickup in solar panel demand. The solar industry has suffered this year from a lack of available financing for renewable energy projects due to the financial crisis.
"The China news, in our view, is providing good PR for China-based companies," FBR Capital Markets analyst Mehdi Hosseini wrote in a note to clients. "Yet, in our opinion, it may be insufficient to offset the expected shortfall in 2009 earnings expectations. We simply do not believe that the full extent of disappointing results is baked into stock prices."
CNBC/Reuters
Shares of top Chinese panel maker Suntech Power Holdings soared 10 percent, Yingli Green Energy Holding climbed 14 percent, Trina Solar rose 10 percent and JA Solar Holdings was trading 7 percent higher.
Beijing's bid to boost the solar energy sector could draw more than $10 billion in private funding for projects and put China on track to become a leading market for solar equipment in the next three years.
As the world's top greenhouse gas polluter, China is trying to catch up in a global race to find alternatives to fossil fuels, blamed for carbon emissions affecting the planet's climate.
Expectations of such a move by China have underpinned a rally in Chinese solar stocks for much of this year.
Several analysts warned on Tuesday, however, that the subsidy program, although positive, would not lead to a near-term pickup in solar panel demand. The solar industry has suffered this year from a lack of available financing for renewable energy projects due to the financial crisis.
"The China news, in our view, is providing good PR for China-based companies," FBR Capital Markets analyst Mehdi Hosseini wrote in a note to clients. "Yet, in our opinion, it may be insufficient to offset the expected shortfall in 2009 earnings expectations. We simply do not believe that the full extent of disappointing results is baked into stock prices."
CNBC/Reuters
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