BERLIN, Germany ( TheStreet) -- Solar companies may have a better reason on Tuesday than some bullish calls from bullish solar analysts to support their second-consecutive day of rallying.

The Christian Social Union (CSU), a sister party to the Christian Democrats, is planning to fight the proposed timing for Germany's solar tariff feed-in reduction, according to a report from Reuters' Berlin bureau.

German's environment minister proposed cuts in rooftop solar systems of 15% by April, and it was the April deadline for the reduced tariffs, more so than the level of the reduction, that stunned the solar industry and sent solar shares into a selloff.

Hans-Peter Friedrich, the CSU leader in Germany's parliament, told Reuters that all of the proposed solar feed-in tariff cuts should be pushed back by three months.

In the case of rooftop systems, that would mean a July 1 date -- which had been the original expectation of the industry. For open-field and farmland solar, CSU is gearing up for a fight to push the tariff reductions back to Sept.

As one of the three most powerful parties in the German coalition government, the CSU should have considerable clout in the parliamentary process.

While the CSU's Friedrich told Reuters that he supports the cuts in principle, he was also quoted as saying that the timeline for the cuts is unacceptable.

Solar shares rebounded on Monday after bullish calls from Piper Jaffray and Collins Stewart. Solar shares continued their rise on Tuesday morning after Jefferies also provided a cautiously modest assessment for some key solar companies.

On Tuesday at the close, the big integrated Chinese solar players were up the most: Suntech Power ( STP) and Trina Solar ( TSL)were the biggest gainers, up 4%. Yingli Green Energy ( YGE) was up 3.5%, while U.S. solar bellwhether First Solar ( FSLR) was up 3%.

ReneSola ( SOL - Get Report), China Sunergy ( CSUN) and Canadian Solar ( CSIQ - Get Report) were also up around 3%.

If the CSU can wield its parliamentary clout to push the implementation of the feed-in tariff reductions in Germany back by three months, that would bring us back to Jan. 11, when solar shares were at a collective high right before the German proposal.

The critical argument over the earnings hit that solar players will have to absorb as a result of the April deadline would be wiped out -- the best possible resolution of the German tariff situation for solar.

Still, the German parliamentary fight places solar investors in a tough spot. It is hard to pinpoint where the concessions will be made based on the comments of any one party. What's more, Germany has not handled the solar incentive reduction planning as smoothly as it could have done, and that means there is still room for more schizophrenic German party commentary on solar.

It's probably never a good thing when politicians are moving the needle on stocks -- and, even when doing so, can't come to an agreement.

In fact, it is still unclear to this day where the real political power lays in pushing for the solar cuts on the expedited schedule. Much is made of German solar companies Q-Cells and SolarWorld and how badly they could be hurt by the proposed cuts, and the loss of jobs.

However, other solar experts argue that the German solar companies have less than two legs to stand on when making this argument, as they have already outsourced much of their work to the Chinese low-cost players. Q-Cells, furthermore, has moved a big part of production to Malaysia. Indeed, Q-Cells announced today that it planned to create 500 new jobs in its Malaysian subsidiary.

Consumer groups have long been lobbying against solar and the higher electricity rates being paid by consumers, but it is not clear that consumer advocacy is what moves the German political needle either.

Some solar analysts suggest that neither the solar industry or the consumer groups have the ear of the government as much as big German conglomerates like Siemens. Several solar analysts said that Germany's economy is an export economy, and it is an economy that has been hurting. Therefore, higher electricity rates can add up in a hurry for Siemens, especially when overall economic conditions are tight, and that may be a bigger trigger for government action than the potential loss of solar jobs.

In the least, consumer groups and pro-business leaders in the center-right ruling coalition will still be pushing for big cuts in the solar feed-in tariffs, and forecasting the fight with the CSU may be a fool's game at this point.

The current unrest in Germany, and the German government's inability to handle its response to the precipitous drop in solar pricing more smoothly for all concerned, means political uncertainty -- and not fundamental financial data -- will continue to dominate in solar trading.

If you were a solar bull regardless of Germany's planned cut or, for that matter, a solar bear before the political tussle started, your personal solar investing needle may be back to its starting point.

The solar sector profit-takers who used the original Reuters article as an opportune time to book some profits in the heavily run up Chinese solar players of 2009, may be the only ones to truly, and cleanly, benefit from the German muck.

For other investors, however, it would be nice if Germany's top politicians spoke to each other about solar before speaking so much to Reuters.

-- Reported by Eric Rosenbaum in New York.


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