(By Salman - iStockAnalyst Writer)

Bullish Stock of the Day: Evergreen Solar (NASDAQ: ESLR)

Evergreen Solar Inc. (NASDAQ: ESLR) engages in the development, manufacture, and marketing of solar power products primarily in the United States and Europe. It utilizes its proprietary String Ribbon technology process to produce multi-crystalline silicon wafers by growing thin strips of multi-crystalline silicon that are then cut into wafers.

Solar stocks have rallied in past few weeks amid hopes of economic recovery. The solar market is finally showing signs of life. There has been a substantial improvement in credit market and financial players who abandoned U.S. solar energy projects last year during the throes of the banking crisis are beginning to return, potentially setting up a boom of new deals by the end of the year. The 2008 collapse of top solar financier Lehman Brothers and the freeze-up in the global credit markets drove nearly all banks to halt funding for major new solar projects, forcing the makers of systems that turn sunlight into electricity to slash prices for their products and sending their stocks crashing.

Globally, solar industry depends upon government subsidies and incentives. Most of the bigger economies like US, China, German, Spain have already pledged increased assistance to the industry. Evergreen Solar sells bulk of its panels in key European markets like Germany and Spain, where generous federal subsidies ensure high electricity rates for solar energy system.

During the first quarter of 2009, approximately 80% of the company's product was sold in Europe and 20% in the United States, compared to 34% of products in Europe, 65% in the US and 1% other regions in the fourth quarter of 2008. The U.S. market too is expected to pick up as the current administration has approved federal subsidies for manufacturers as well as users of solar panels and solar energy systems.

As part of the stimulus bill signed earlier this year, the federal government approved around $60 billion in loan guarantee authority and $30 billion in energy grants for renewable energy and transmission companies. Congress has also granted a 30% renewable-investment tax credit to help expand the development of alternative sources of energy. It is being expected that the federal money would become available in the second half of this year.

China is yet another potential market. The fastest growing economy recently said that it will introduce a preferential tariff and it will pay energy companies that use solar power for their generating capacity, as part of the government's push for greater use of clean technology.