Solar Stocks Up on Prospects of Obama Presidency

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We agree with the general premise that an Obama White House/Democratic Congress combination sets up the prospect for a greater amount of federal action on the renewables front than would be the case under Senate McCain,” Raymond James Analyst Pavel Molchanov writes. “However, we do not envision immediate action (within, say, the first 100 days) on these issues.

Solar stocks Tuesday have extended Monday’s torrid rally, apparently getting a boost from investors anticipating that a victory Tuesday for Democratic presidential candidate Barack Obama will be good news for the alternative energy business. But before you jump in, you might want to think for a moment about what will actually transpire - and on what timetable.

While it may be true in the long run that an Obama presidency will be good for solar shares, a change of administrations will not be a cure-all. Raymond James analyst Pavel Molchanov Tuesday morning cautioned that investors should not expect any “instant gratification in terms of new goodies from Washington,” especially given that Congress has already approved an 8-year extension of the solar investment tax credit.

“We agree with the general premise that an Obama White House/Democratic Congress combination sets up the prospect for a greater amount of federal action on the renewables front than would be the case under Senate McCain,” Molchanov writes. “However, we do not envision immediate action (within, say, the first 100 days) on these issues. To put it bluntly, while solar and wind are important, there are much bigger things on the plate that policymakers in the U.S. are understandably focusing on within the context of the global financial crisis.”

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