Stocks of solar power producers have been moving up of late as prospects for the industry looks bright on increased investor financing of residential solar systems and returning stability to the prices of polysilicon and solar panel pricing.
Solar energy group stocks have been up as a whole while specific stocks have been showing a particular spike.
Notable among these are SunPower Corporation(NASDAQ:SPWR), Installer SolarCity Corp(NASDAQ:SCTY), First Solar, Inc.(NASDAQ:FSLR), and China’s Yingli Green Energy Hold. Co. Ltd. (ADR)(NYSE:YGE) among others.
Silicon, the raw material which is used in the production of solar panels, is made from chiefly sand and other sources. Earlier supplies of silicon was tight pushing up prices, but of late there has been a glut in the market and this has resulted in the prices of polysilicon dropping.
Solar energy producers are taking advantage of the lowered prices to stock up on the raw material.
The glut, of course, has led to polysilicon producers such as Wacker Chemie, OCI, Hemlock Semiconductor, all lowering production in the fourth quarter of 2012.
Part of the rise in the stocks earlier this week was also due to a couple of research reports which gave an optimistic outlook for the sector.
Credit Suisse analysts wrote that polysilicon prices had reached a trough after years of price declines.
“A flat pricing has diminished the ‘second derivative’ negative for solar stocks,” the Credit Suisse analysts wrote. They cited positives for solar stocks such as stable pricing leading to gradual demand recovery in new geographies.
What needs to change now is excess panel capacity in China and write-downs or restructuring of debt for several companies.
Shares SPWR were up 22.40%, extending its weekly gain to over 55%, while FSLR climbed 7.61% and are up 23% so far this week.
Shares of SCTY were up 4.50%, extending its weekly gain to over 21% and JA Solar Holdings Co., Ltd. (ADR)(NASDAQ:JASO) was up 5.50%.
LDK Solar Co., Ltd (ADR)(NYSE:LDK) added 6.50% as well.