This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

UK Solar Stocks Could Shine Plugging Into Incentive Plan

NEW YORK (Trefis) -- The U.K. solar industry could add as much as 600 megawatts of solar capacity by next April despite government cuts in subsidies and other limitations imposed on utility scale plants.

Solar companies are using a decade-old renewable energy incentive program to sidestep a 5-megawatt cap on solar plants that rely on feed in tariff subsidies. The latest rush to build new solar plants comes despite government efforts to limit installations by cutting tariff subsidies last year.

Dropping costs for setting up utility scale solar plants has encouraged investors to use Renewable Obligation Certificates (ROCs). Although the returns through the program are lower than through other programs, their use allows utility scale developers to override the 5-megawatt limit of solar farms that is currently in place.

Increased installations in the U.K. through 2012 could have a positive impact on the global sales of SunPower (SPWR). We have a $7.50 price estimate for SunPower, which is at a 50% premium to its current market price.

Click here for our full analysis of SunPower. (link: https://www.trefis.com/company?hm=SPWRA.trefis)

Large-scale Development

Across Europe, governments are taking steps to limit the development of utility scale plants. Germany imposed a 10-megawatt limit on solar projects in the latest overhaul of its subsidies program, and countries such as Italy are focusing on small-scale and rooftop solar installations.

Developers of utility projects are therefore being forced to adopt other means to tap into energy subsidies. Renewable Obligation Certificates were introduced by the U.K. in 2002 to originally support the development of offshore wind farms.

Despite the low returns through the ROC program, developers are using the route to plan multiple large-scale plants, which could result in the addition of around 600 megawatts of capacity over the next several months. Equipment manufacturers such as SunPower could benefit from such a jump in installations.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,098.45 +18.88 0.11%
S&P 500 2,003.37 +6.63 0.33%
NASDAQ 4,580.2710 +22.5760 0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs