European solar stocks, including Q-Cells AG and Renewable Energy Corp. ASA,
rallied after Germany's ruling coalition government agreed to implement
smaller-than-expected subsidy cuts.
Q-Cells, Germany's largest solar-power company, surged as much as 8.8 percent,
the biggest one-day gain in two months, and traded at 75.90 euros as of 12:03
p.m. in Frankfurt. Renewable Energy, the largest maker of polysilicon used in
solar panels, climbed as much as 6.8 percent in Oslo.
The Christian Democratic Union and Social Democratic Party agreed last night to
a draft proposal that envisages ``significantly lower'' subsidy cuts than the
CDU had previously suggested, Hermann Scheer, an SPD member of the lower house
of parliament, said by telephone today.
The biggest solar power facilities could face a 10 percent reduction in
subsidies a year from 2009, Scheer said. Solar stocks slumped earlier this week
after an industry association said May 27 that the CDU and its Bavarian sister
party, the Christian Social Union, favored cutting grants by more than 25
percent during the next two years.
Scheer declined to comment on precisely how much subsidies will decline each
year through 2011 since the draft still needs to be debated by both coalition
partners. A final vote in the Bundestag, or lower house of parliament, should
take place before the first week of July, according to Scheer.
Deutsche Presse Agentur reported earlier today that the proposed subsidy cuts
may be less than initially anticipated.
Solarworld AG, Germany's third-biggest solar company, jumped as much as 9.5
percent, its biggest gain since Feb. 12, and last traded at 32.14 euros. Phoenix
Solar AG added 9.3 percent to a record 47.93 euros in Frankfurt.
Solarworld slumped 5.6 percent yesterday after Merrill Lynch & Co. cut its
rating on the stock and other solar companies to ``sell'' from ``neutral.''