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Zacks Investment Research upgraded ReneSola Ltd. (SOL - Analyst Report) to a Zacks Rank #1 (Strong Buy) on Oct 5, 2013.

Why the Upgrade?

In its short operating history, ReneSola has constantly fine-tuned, diversified and enlarged its product mix. The company has proved to be resilient and well adept at adjusting to changing market dynamics.

With most of its solar peers in trouble due to an oversupply of solar panels, ReneSola seems to be in a better position with multiple contracts and agreements. The company is a prominent player in the U.S. solar market. Despite the implementation of countervailing duties and anti-dumping duties on Chinese solar products by the U.S. government, the company is regularly winning contracts in the U.S. due to the high standard of its products and services.

Recently, ReneSola has been selected by Panasonic Eco Solutions North America for the first time for its high-efficiency polycrystalline modules. These modules will be utilized by Panasonic for its multiple photovoltaic (PV) projects. Again, ReneSola won a contract from solar developer EcoPlexus to supply 6,480 units of solar panels. EcoPlexus utilized these panels for the completion of its 2 MW solar PV facility in California.

Like most of the Chinese solar product manufactures, ReneSola is also expanding its footprint in the Asian, African and European markets to offset any slowdown in U.S. orders. Recently, the company signed a series of agreements with Lightsource Renewable Energy Limited, the largest solar energy generator in the U.K. Per the agreement, the company will provide 69.5 megawatt (MW) of solar modules for installation on solar farms in the U.K.

In spite of ReneSola reporting in the red in the second quarter, the narrower-than-expected loss is encouraging. Also, the top line succeeded in beating the Zacks Consensus Estimate. The results reflect the company’s focus on improving selling prices. Despite a challenging macro environment and a competitive solar industry, the company continued to make substantial progress and exceeded its shipment volume guidance. In order to build its brand image, the company also introduced its proprietary technology to customers across multiple international markets.

On top of it, the announcement made by China’s Ministry of Finance lifted Chinese solar stocks across the board. Recently, the Chinese government announced that local solar manufacturers will receive immediate refunds of 50% of the value-added tax for sales taking place from Oct 2013 through Dec 2015. The Chinese government has already set a solar installation target of 35 gigawatt by 2015.

Other Stocks that Warrant a Look

In addition to ReneSola, one can also consider other stocks in the sector such as SunPower Corp. (SPWR - Analyst Report), JA Solar Holdings Co., Ltd. (JASO - Analyst Report) and JinkoSolar Holding Co. Ltd. (JKS - Snapshot Report) as attractive investment opportunities. While SunPower sports a Zacks Rank #1 (Strong Buy), JA Solar and JinkoSolar hold a Zacks Rank #2 (Buy).

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