Sector Snap: Solar Companies Surge

Shares of Chinese solar power provider Solarfun Power Holdings Co. Ltd. soared after the company said Thursday its fourth-quarter profit soared to 66.4 million yuan ($9.1 million) from 29.5 million yuan in the year-ago quarter, beating Wall Street estimates.

Goldman Sachs analyst Cheryl Tang called the results "solid" in a Thursday client note as shares of Solarfun advanced $1.99, or 17.4 percent, to $13.45.

Meanwhile, Collins Stewart analyst Daniel Ries offered a positive assessment for the sector as a whole. He said several solar companies stood to benefit after utility Southern California Edison announced plans to install 250 megawatts of solar energy on commercial rooftops over the next five years.

"To put this order in perspective, the U.S. market for solar modules was approximately 230 (megawatts) in (2007) ... of which California was approximately 200 (megawatts)," Ries said.

Ries said he forecasts the U.S. solar market to grow to 450 megawatts in 2008, which California accounting for the majority of the demand.

He highlighted SunPower Corp. as positioned to benefit from the utility's move, given its location in California. Shares of San Jose-based SunPower gained $3.03, or 4.1 percent, to $74.72 in afternoon trading Thursday.

Ries singled out First Solar Inc., saying the company had a $6 billion backlog of work.

First Solar also got a boost from Soleil Securities Group analyst Paul Leming, who raised his per-share earnings forecast for the Phoenix company to $3.50 from $2.52 for 2008, calling its performance over the past year "phenomenal."

First Solar shares jumped $10.03, or 4.6 percent, to 230.22.