The trade is favorable today in solar energy companies after President Obama this morning defended government subsidies for renewable energy, as reported by Reuters’s Roberta Rampton.
In the wake of the high-profile failure in August of Solyndra, a California firm whose federal backing has drawn a congressional investigation, the president remarked during a press conference, “We knew from the start that the loan guarantee program was going to entail some risk.”
Solyndra, which has ceased operations and plans to file for bankruptcy, has called into question the political will to continue to offer loan guarantees to solar firms for U.S. projects, a concern that has weighed on the shares of top solar names, including First Solar (FSLR).
Obama is in some sense defending the line of reasoning eloquently laid out by James Surowiecki in the latest issue of New Yorker magazine, namely, that investment by government involves risk, no different from investment by venture capitalists.
In any event, solar names are outperforming today. First Solar is up $3.65, or 6%, at $64.51; ReneSola (SOL) is up 29 cents, or almost 18%, at $1.93; JA Solar Holdings (JASO) is up 14 cents, or 7.4%, at $2.03; SunPower (SPWRA) is up 55 cents, or 7%, at $8.33; and Trina Solar (TSL) is up 59 cents, or almost 8%, at $8.12.
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