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Solar Winners and Losers: JA Solar, Trina

(Solar sector story updated for closing prices and volume)

NEW YORK (TheStreet) -- The solar rally was nice while it lasted, but it ended on Wednesday, at least for most of the solar players.

Trina Solar (TSL) was the lone winner on Wednesday, while JA Solar led the losses in the abrupt end to the two-day solar sector rally.

On Tuesday, solar stocks had experienced their second-consecutive rally day, as resistance to Germany's proposed solar tariff feed-in cuts surfaced -- though those reports may turn out to be overstated.

Solar shares had been on a losing streak for two weeks, before this week, ever since the German news first broke.

On Wednesday, it wasn't just Germany moving the solar needle lower, but big news from Italy.

The level of solar feed-in tariff reductions proposed by Italy is not a game-changer, even while it will reduce return potential in what has been the most lucrative solar market.

The game-changer is that Italy is planning on an 8,000 megawatt (MW) solar cap between now and 2020, and at least 100MW of annual capacity is earmarked for concentrated solar power generation, distinct from the type offered by the big publicly traded photovoltaic solar stocks.

As Italy is expected to be one of the biggest solar growth drivers in the next decade, limiting the level of growth to 700 MW annually is a significant impediment for the fortunes of solar stocks.

Consider this: even Gordon Johnson, the solar analyst at Hapoalim Securities well know for his bearish outlook on solar, said his models are now too bullish given the unexpected 8000 MW cap proposed by Italy. "Even our estimates now seem crazy,' Johnson said.

Now that's something.

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