Solar stocks rally again; Chinese government steps up support

|By:, SA News Editor

Solar stocks started 2014 with a bang, and are adding to their momentum today (TAN +4%) with the help of positive industry and company-specific news.

The Chinese government, which last year set a 35GW 2015 cumulative installation target, is now promising additional support, and says it will draft guidelines for industry M&A. Consolidation with China's fragmented solar cell/module market could both lower overcapacity (already declining thanks to rising demand) and lead to further margin expansion.

Yingli (YGE +8.7%) and Canadian Solar (CSIQ +7.4%), both of which saw huge 2013 gains, are today's biggest gainers. Yingli has announced it's forming a JV with state-owned China National Nuclear Corp. to create 500MW of utility-scale solar projects. Canadian has announced a deal to supply 25.3MW of modules for four North Carolina projects.

Also: Hanwha (HSOL +4.6%) has signed an MOU to supply up to 50MW of modules to U.S. residential solar installer OneRoof Energy.

Other gainers: FSLR +2.7% (hit by a Goldman downgrade yesterday). SUNE +4.4%. DQ +4.9%. CSUN +3.2%. JASO +5.5%. ENPH +6.8%. ASTI +3.8%. JKS +3%.