From Tech Trader Daily:
Shares of solar power technology firms are tanking following a note from Merrill Lynch analyst Mark Heller cutting his rating on SunPower (SPWR) and Evergreen Solar (ESLR) from “Neutral” to “Sell” because Germany’s government may cut subsidies for solar by as much as 25%. Subsidies are currently necessary to goose investment in solar power in many countries.
According to the Bloomberg account of things, Heller thinks analysts’ expectation of a 16% cut is too low. “An increasing number of politicians are advocating a bigger cut to the German solar subsidy due to the escalating cost,” Bloomberg quotes a Merrill analyst, Matthew Yates, as writing in the report. The note follows another note that came out yesterday from Calyon Securities analyst George Kotzias that claimed the escalating burden on taxpayers was prompting the German government to consider cutting the subsidy by 15%, according to the Associated Press. The US’s own investment tax credit is a looming issue for solar later this year and next....MOREMerrill Lynch cuts Solar Sector (FSLR; SPWR)