Associated Press, 05.18.09, 03:46 PM EDT
The solar sector soared in Monday trading as last week's record-setting solar thermal contract from Pacific Gas & Electric signaled continued demand from utilities.
Shares also rose ahead of the much-anticipated energy bill, which investors expect will deliver generous provisions for solar energy once passed.
Last week, California utility Pacific Gas & Electric Co. signed new solar contracts with Oakland-based BrightSource Energy for a total of 1,310 megawatts of solar thermal power, the nation's largest solar deal.
Raymond James analyst Pavel Molchanov said the deal signals solar power's growing mainstream acceptance by utilities. Solar thermal power is economically viable only in areas of high-sunlight and is a utility-scale technology because it is used to power large, conventional turbines, Molchanov noted.
PG&E's "mega-deal" for solar thermal power boosts demand from utilities for photovoltaic products as well. As this trend builds momentum, utilities could offer the industry the most durable source of photovoltaic demand.
Molchanov rated GT Solar International Inc., JA Solar Holdings Co. and Real Goods Solar Inc. "Outperform." He also recommended buying shares of First Solar Inc., which he rated "Strong Buy."
Shares of GT Solar jumped 18 cents, or 3.4 percent, to $5.55 in afternoon trading. JA Solar shares rose 5 cents to $3.16. Real Goods Solar share rose 4 cents to $2.12. Shares of First Solar climbed $7.28, or 4.1 percent, to $184.71.
Elsewhere in the industry SunPower Corp. shares increased $1.35, or 5.4 percent, to $26.40. Trina Solar shares rose 62 cents, or 3.7 percent, to $17.53. Molchanov rated both these companies "Market Perform."