Fed announces stimulus, First Solar price up nearly 8 percent

First Solar, the manufacturers of thin-film solar panels, were up in the stock market on Friday following the passing of a bill by the House Republicans. The Federal Reserve announced the financial stimulus for the energy sector the day.

The energy sector has been declining in the midst of the global economic woes, chiefly due to the lack of demand from the Euro Zone. The oil prices recently hit $100 a barrel in the last four months and that brings up the demand of the clean solar energy. The stimulus has been icing on the top.

First Solar’s share price hiked 8 percent on the last working day of the week after the announcement.

The House Republicans also ceased the bill on Friday that would have allowed the Fed to financially assist smaller companies like Solyndra, a start-up that is now bankrupt. The government-aided assistance to smaller companies spiked up the competition for bigger companies like First Solar. However, now the game will be played fair and square.

Companies like First Solar make thin-profile solar panel modules and help bring down the production cost and the final product price thereafter. These films are a competitive alternative to the standard hotovoltaic, or PV, panels that were again coming into demand. Solyndra also made thin-film panels like First Solar.

“A recent bounce in PV stocks has likely been driven by news of strong U.S. installations (and an EU trade case against China aided U.S. names),” Cowen & Co. analyst Robert Stone said in a midweek research note. However, he says, average selling prices keep falling “and U.S. growth will slow from 2013 as Treasury Grant and utility projects roll off.”

“(Sunpower) looks best positioned for eventual U.S. residential grid parity,” Stone noted, referring to the point at which solar energy costs the same as conventional energy sources. He says First Solar “likely faces severe competitive pressure as project backlog declines,” and has a neutral rating on the solar stocks group.

The new stimulus coupled with the bill from House of Republicans will certainly assist companies like First Solar. However, experts say that Democratic-led Senate will be a tough feat for the bill.

Short URL: https://www.newspakistan.pk/?p=32763

Posted by Usman Khalid on Sep 17 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.