This is what caused the solar stocks to jump;
.Suntech Leads N.Y. Stock Climb on Solar Demand: China Overnight
QBy Belinda Cao - Feb 8, 2012 2:57 PM PT .
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Business ExchangeBuzz up!DiggPrint Email ...Chinese solar companies climbed, driving an index of the nation’s stocks traded in New York to gain the most in a month, as Renewable Energy Corp. ASA said demand for the technology is shifting to Asia and the U.S.
Suntech Power Holdings Co. (STP), the world’s largest solar-panel maker, jumped 6.9 percent while Trina Solar Ltd. (TSL) rose to a three-week high. Semiconductor Manufacturing International Corp. (SMI), a Shanghai-based circuit-chip maker, advanced after saying first-quarter sales will increase from the previous three months and traded at the biggest discount in two weeks to stock in Hong Kong. The Bloomberg China-US 55 Index of the most-traded Chinese equities in the U.S. advanced 1.6 percent to 106.13 yesterday in New York.
Oversupply in the global solar industry is showing signs of abating with demand expected to shift from Europe to Asian and U.S. markets, Renewable Energy (REC), a Sandvika, Norway-based maker of polysilicon used for producing solar modules, said in its earnings presentation yesterday. China’s government aims to double solar installations this year and has set preferential power tariffs designed to encourage manufacturers and developers to move into cleaner energy sources.
“Chinese solar stocks rebounded after a big loss last year as we see a natural dynamic of geographical diversifications from Europe to Asia,” Hari Chandra Polavarapu, an analyst who covers the Chinese solar industry at Auriga USA LLC in New York, said in an interview yesterday. “There is optimism in rising China demand and it needs to adopt policies to greatly increase solar installations, which will favor its own manufacturers and the industry globally.”
China ETF Gains
The iShares FTSE China 25 Index Fund, the biggest Chinese exchange-traded fund in the U.S., rose 1.7 percent to $40.40, the biggest jump in three weeks.
Suntech Power rose to $3.85, the highest level since September, extending its advance in the U.S. this year to 74 percent. The stock slid 72 percent in 2011 as solar module prices fell amid industry overcapacity.
Trina Solar, China’s fifth-largest solar-panel supplier based in Changzhou in the eastern Jiangsu province, surged 13 percent to $9.23, the most in four weeks. Yingli Green Energy Holding Co. (YGE), a Baoding, China-based maker of solar modules, rose 7.5 percent to $4.90, the highest level since Jan. 18.
China plans to develop three gigawatts of solar capacity this year, double its existing capacity, the National Energy Administration said on its website on Jan. 11. Installations in China may reach four gigawatts this year, Zhenrong Shi, Suntech’s chief executive officer, said in a Bloomberg TV interview in Davos on Jan. 25.
Not Enough
The addition of three to four gigawatts in installations annually is not enough for China, according to Auriga’s Polavarapu. Installations may reach as much as seven gigawatts this year, and the annual level should be 10 gigawatts in the next five years should the government provide support to the industry, he said. Polavarapu recommends investors “hold” Suntech Power shares and “buy” Trina Solar and Yingli Green.
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