SunPower, Suntech Expect U.S. Tax Credit to Rescue Solar Power (SPWRA; STP)

From Bloomberg:

SunPower Corp. and Suntech Power Holdings Co., solar manufacturers that lost half their value in the past month, are counting on tax credits in the U.S. bank bailout bill to boost sales as European incentives wane.

Utilities, warehouses and retailers from Wal-Mart Stores Inc. to Whole Foods Market Inc. can deduct 30 percent of a solar system's cost from federal income taxes. The savings are part of the $700 billion legislation to bolster the banking industry, which also contained tax breaks for wind power and fuel cells.

Solar manufacturers lost more than $27 billion in market value in a month as concern mounted a U.S. recession and the 45 percent decline in oil prices will reduce demand for renewable energy. U.S. subsidies for the next eight years may help solar power compete with coal as Spain and Germany, the world's largest markets, reduce subsidies.

``Utilities in the U.S. are opening their minds to rooftop solar and that's going to be huge for the SunPowers of the world,'' said David Prend of Rockport Capital Partners in Boston, which manages $800 million in clean technology startups. ``The bank bailout package will rescue solar."...MORE

HT: Environmental Capital