Sector Snap: Alternative Energy Companies
Shares of alternative energy companies soared Wednesday after Congress reached a tax deal that kept a few key clean energy subsides in place.
The deal to avoid the so-called fiscal cliff extended some subsidies that were set to expire this year, and left untouched others that may yet be eliminated or trimmed when Congress takes up government spending cuts over the next two months.
Shares in companies working to make advanced biofuels rose, because a tax credit of $1.01 per gallon will remain in place this year. Gevo, Inc. shares rose 16.9 percent to $1.80 in afternoon trading and Solazyme, Inc. shares rose 6.4 percent to $8.3.
The main wind power subsidy, called the production tax credit, will be extended for this year as part of the deal. That helped send shares of Broadwind Energy Inc. up 11.6 percent to $2.41. Kaydon Corp., which makes bearings and other parts for wind turbines, rose 3.1 percent to $24.68. Shares of two of the world's biggest wind turbine makers, General Electric Corp. and Siemens AG, were also higher, although wind turbines are only a small part of both conglomerates' operations.
A provision that allows solar installers to receive subsidies in the form of a cash grant was left untouched, which helped send shares of solar panel makers higher. Suntech Power Holdings Co. Ltd. shares were up 5.9 percent to $1.62 and shares of Yingli Green Energy Holding Co. Ltd. rose 4.7 percent to $2.46.
SunPower Corp. shares were up 8.9 percent to $6.12. SunPower announced that MidAmerican Energy would buy two solar projects under construction in Southern California for up to $2.5 billion.
The alternative energy sector's rise was reflected in the PowerShares WilderHill Clean Energy exchange traded fund, which invests in clean energy companies. Shares in the fund jumped almost 4 percent to $4.24.