With the recent problems at the nuclear power plants in Japan, solar energy is looking to be the big beneficiary of a shift to safer energy sources. Solar stocks have been on the upswing in recent weeks as Japan's tragic nuclear crisis has led investors away from nuclear stocks and towards alternative energy plays. Companies such as LDK Solar (NYSE:LDK) and Yingli Green Energy (NYSE:YGE) are expanding their business quickly.
Japan's devastating earthquake may impact solar in both the short and the long term. Japan accounts for around 10% of total world solar production, and in the near term there will be a reduction in supply of polysilicon, solar wafers, cells and modules from Japanese manufacturers that have been idled.
Longer term, alternative energy bulls are hopeful that solar will be a direct beneficiary of a shift in Japan's energy strategy. Last week Jefferies analyst Jesse Pichel argued in a research note that solar power could help Japan deal with the nuclear facility shutdowns. He asserted the country could add a significant amount of photovoltaic power over the next few months.
Recently LDK Solar swung to a 4th quarter profit as the solar wafer manufacturer posted growth in shipments and revenue. LDK said profits totaled $145.2 million compared to a loss of $24.3 million.