US-listed solar stocks soared on Wednesday after Auriga analyst Hari Chandra slapped “buy” ratings on four companies in the battered sector, including China’s Trina Solar Ltd and US panel maker SunPower Corp.
Wednesday’s move by major central banks to add liquidity to the world’s financial system will ease financing for photovoltaic solar projects, Chandra said in research notes in which he upgraded his ratings on Yingli Green Energy Holding Co Ltd, Suntech Power Holdings Co Ltd and MEMC Electronic Materials Inc in addition to Trina and SunPower.
“The near-term band-aid solution would also ease the strains seen in solar PV financing, and aid near-to-medium term demand,” Chandra wrote.
Access to financing has been a big challenge for the rapidly growing solar industry, which has also been hard-hit this year by a global panel glut that has sent prices into a tailspin and hurt manufacturers’ profits.
The turmoil has also sent stock prices in the industry to multi-year lows.
In the United States, financing for solar projects has been bolstered by a tax credit program that is set to expire at the end of this year, causing concern among some in the industry that financing will become even more limited.
But on Wednesday, the US Federal Reserve and the European Central Bank, as well as the central banks of Canada, Britain, Japan and Switzerland agreed to lower the cost of existing dollar swap lines — reducing the cost of temporary dollar loans to banks — by half a percentage point.
The moves followed an unexpected cut in bank reserve requirements in China, intended to boost the weakest economy since 2009.
Auriga’s Chandra upgraded SunPower, Trina and Yingli to “buy” from “sell,” while MEMC was upgraded to “buy” from “hold.” Suntech was upgraded to “hold” from “sell.”
Trina soared 15.2 percent following the upgrade, while Yingli was up 10.6 percent and Suntech was up 8.4 percent.
MEMC was up 3.5 percent, while SunPower was up 4.7 percent.
The news also lifted other solar stocks, with First Solar Inc trading up 8 percent, JA Solar Holdings Co Ltd rising 17 percent and Canadian Solar Inc soaring 19 percent.
The MAC Global Solar Energy index was up 5.67 percent.
