Oct. 1 (Bloomberg) -- An index of Chinese solar manufacturers led by LDK Solar Co. and Suntech Power Holdings Co. rose the most in eight weeks as China announced a tax rebate for power produced from sunlight and more panel makers begin developing their own projects.
The NYSE Bloomberg Global Solar Index of 102 companies rose 2.6 percent to $712.58 at 5:45 p.m. in New York yesterday, the most since Aug. 5. LDK gained 30 percent to $1.93 and Suntech climbed 26 percent.
Chinese solar companies are rising because they’re starting to expand into project development, a strategy that may boost revenue and margins, Gordon Johnson, an analyst at Axiom Capital Management in New York, said yesterday in an interview. Panel producers will also benefit from a 50 percent value-added tax rebate the Ministry of Finance announced online Sept. 29, Johnson said.
“The assumption is that the project business in China will allow Chinese solar companies to sell modules to themselves,” he said.
U.S. companies including First Solar Inc. and SunPower Corp. already develop their own projects, and have reported profits this year.
China’s solar market is accelerating, Deutsche Bank analyst Vishal Shah wrote in a note on Sept. 27. Installations in 2014 are expected to reach an annual run rate of 13 gigawatts to 15 gigawatts, from 6 gigawatts to 7 gigawatts this year.
--Editors: Will Wade, Steven Frank