(Re)New Sector

Renewable energy stocks rose Friday after the Senate passed a revised energy bill, and solar-power companies reported new contracts.

The bill -- passed by a vote of 86 to eight -- raised sixfold the amount of renewable fuels that must be used for blending of products like gasoline, to 36 billion gallons a year by 2022. The legislation boosted ethanol stocks Friday.

I anticipate that this new legislative mandate will do alot to help the renewable energy market. Since profits will continue to be slim, subsities cant be far behind; Congress has already opened up its wallet to cotton and the steel industry.

However, a mandate for utilities to derive 15 percent of electricity from renewables by 2020 was scrapped from the bill, representing a "marginal negative" for solar companies, according to Calyon Securities analyst Kelly Dougherty. Had that Mandate remained it would have really pushed stock prices up.

Pacific Ethanol Inc. led gains in ethanol stocks, rising 65 cents, or 10.8 percent, to $6.69 in midday trading. Aventine Renewable Energy Holdings Inc. rose $1.10, or 10.7 percent, to $11.39, while BioFuel Energy Corp. rose 46 cents, or 8.1 percent, to $6.12, and Verasun Energy Corp. rose $1, or 7.1 percent, to $15.

Among solar energy stocks, China Sunergy rose Friday after it said it would supply solar cells to German solar-system maker asola Automotive Solar System GmbH next year. The stock advanced $1.56, or 16.3 percent, to $11.11.

Elsewhere, Evergreen Solar Inc. climbed after it reported a 10-year polysilicon supply agreement with Silicium de Provence SAS on Thursday. Dougherty lifted Evergreen's rating to "Buy" from "Add" and increased his price target to $22 from $15.

Shares of Evergreen Solar rose $1.73, or 11.5 percent, to $16.84. Earlier, it traded at a 52-week high of $17.75. Akeena Solar Inc. rose 93 cents, or 14.4 percent, to $7.40, and JA Solar Holdings Co. gained $7.72, or 12.3 percent, to $70.74.