The company’s problems have not been overlooked by investors. The company posted a new 52-week low of $1.17 in early October and is hovering around $1.20-$1.25. The shares hit an all-time high of around $25 in mid-2007, but since mid-2008 shares have never gone above about $6.50. Shares traded at a high of $6.35 in early January of this year, but the delay in the federal loan guarantee and the soon-to-expire contracts combined with an EPS loss so far this year of -$0.37 weighs too heavily to bring shares back to anything approaching the January levels.

The answer to a simple question is likely to determine USEC’s future: does the US need its own state-of-the-art uranium enrichment facility, and if so should the government provide the loan guarantee to build it? The debacle with Solyndra and its $535 million loan would be almost small change if the $2 billion USEC loan is approved and then the company folded.

According to The New York Times, the Obama administration is considering a $300 million loan guarantee that would allow the company to prove that its centrifuges work as a pre-condition to the full loan amount to build the plant. But that’s one of those “in for a penny, in for a pound” deals. If the government guarantees even some fraction of the $2 billion, shares in USEC will rebound on the expectation that the rest will be forthcoming at some future date.

Once again, the Great Yogi gets the final word: it ain’t over till it’s over.

Paul Ausick

Brazil, which currently produces 3% of its electricity, about 2,000 megawatts, from the two Angra 1 and Angra 2 nuclear reactors near Rio de Janeiro, last year told the International Atomic Energy Agency that it will build an additional eight nuclear power plants in addition to the $5.6 billion Angra 3 station under construction and scheduled to come online in 2015, in order to meet skyrocketing demand for electricity.

Similarly, India is now pressing forward with plans to build six new reactors in the near future as part of an ambitious scheme to see nuclear power providing 25% of the country’s energy needs by 2050.

Brazil’s and India’s embrace of nuclear power contrasts with established European nuclear attitudes following Fukushima, as on 30 May German Chancellor Angela Merkel announced that Germany would close all of its 18 nuclear power plants between 2015 and 2022.

Switzerland, Belgium and Italy have also announced their abandonment of nuclear power plant projects.

But it is in rising BRIC economic superpower India that the future of nuclear power have its severest post-Fukushima test, as current and proposed nuclear power plant facilities come up against growing public resistance in the world’s largest democracy.

Undeterred by such negative news, Indian analysts expect that at next month’s Russia-India Summit in Moscow, Indian Prime Minister Manmohan Singh and Russian Federation President Dmitri Medvedev will conclude commercial contracts for Russia’s Atomsexport to construct an additional two reactors in India.

The facilities would complement India’s currently operating 20 nuclear power plants. New Delhi intends to quadruple its present 4,780 megawatts of nuclear power generation to 20,000 megawatts within a decade to fuel the rising energy demands of a booming economy.

But Prime Minister Singh has already had a foretaste of public opposition to the country expanding its nuclear power base in the form of southern India’s Kudankulam Nuclear Power Project in Tamil Nadu, which even predates the 1991 collapse of the USSR.

In November 1988, Indian Prime Minister Rajiv Gandhi and Soviet General Secretary Mikhail Gorbachev signed an Inter-Governmental Agreement on constructing Kudankulam, but the project was mothballed for years following the implosion of the Soviet Union.

While the $2.5 billion Kudankulam facility is now under construction and nearing completion, it has not been without controversy, generating growing protests from local residents. If plans for the Kudankulam nuclear power complex ever come to fruition, then the facility eventually will contain six 1,200 megawatt and two 1,000 megawatt reactors. Kudankulam’s first reactor is expected to go online next month.

In a major government PR campaign to burnish the image of Kudankulam, India’s former President, A. P. J. Abdul Kalam, the father of India’s missile program, on 6 November visited the site and declared, “I went to the plant as an individual. It really is a modern plant, and there are 2,000 megawatts ready to be pumped into the grid. Solar power is clean energy, nuclear power is clean energy and hydroelectric power is clean energy.” Kalam added that he was “completely satisfied and happy with the sophisticated safety features of the reactors.”

But local protests against the facility have been on the rise since September, as local Christian fishermen communities express their fears and undertake civil disobedience, including 1,000s blocking roads and a number of protestors undertaking hunger strikes, giving the central authorities in New Delhi a major public relations headache. More worryingly, the villagers are backed by the newly elected Tamil Nadu state government.

The stakes are immense, with implications extending far beyond India. Besides Rosatom, major global nuclear power companies such as the U.S. firms General Electric, Westinghouse and Bechtel and with France’s Areva and Japan’s Toshiba, Hitachi and Mitsubishi firms have all eyed India since Washington in 2008 ended its prohibition on nuclear technology transfer to India as a potentially vast and profitable new market.

Nor are the Kudankulam protests New Delhi’s only headache. In Maharashtra, locals are demonstrating against the proposed 9,900 megawatt Jaitapur Nuclear Power Plant. Even worse, even the costs of such projects are coming under scrutiny, as thoughtful Indian columnists are now questioning the need for foreign reactors that are four times more expensive than indigenous ones.

A. Gopalkrishnan, former chairman of the Atomic Energy Regulatory Board, summed up the government’s failure to assuage the public’s concerns up to now by saying, “When questions are not answered, people get desperate and protest, suspecting that the entire nuclear sector is corrupt. Treating civilian nuclear energy under the Official Secrets Act is unnecessary. The department must realize that people are not village fools. If it continues this way, the sector is in for deep trouble.”

As a democracy, India’s officials must take account of public opinion, however uninformed they find it and a brake on the country’s vaunting financial future.

And in the meantime, Rosatom, General Electric, Westinghouse, Bechtel, Areva, Toshiba, Hitachi and Mitsubishi are watching the outcome of “people power” versus central authority with more than passing interest.

By John C.K. Daly of http://oilprice.com, exclusive to 24/7 Wall St.

The impact on uranium mining companies large and small could be dramatic if more countries follow Germany’s lead and reject nuclear generation completely. Even China has adopted a more ‘slow-go’ approach to nuclear generation. Mining companies include Cameco Corp. (NYSE: CCJ), Denison Mines Corp. (AMEX: DNN), Uranium Resources, Inc. (NASDAQ: URRE), Uranerz Energy Corp. (AMEX: URZ), Uranium Energy Corp. (AMEX: UEC), UR-Energy, Inc. and (AMEX: URG). USEC Inc. (NYSE: USU) processes uranium into a low-enriched form, and General Electric Co. (NYSE: GE) and Shaw Group, Inc. (NYSE: SHAW) are leading builders and servicers of nuclear power plants. France’s Areva (OTC: ARVCY), and Japan’s Toshiba Corp. (OTC: TOSBF) are also among the world’s leading builders of nuclear power plants but are excluded because comparable information for the companies is not available.

One interesting sideshow that could impact all the uranium miners is the current bidding war between Cameco and Rio Tinto plc (NYSE: RIO) for Canadian junior mining company Hathor Exploration Ltd. Hathor is expected to take the Rio Tinto offer, leaving Cameco to shop for other uranium assets, most likely among the small miners we’re looked at here.

All data from Yahoo! Finance and MarketWatch, and current price quotes were gathered just before noon today.

Cameco Corp. (NYSE: CCJ) has a median target price of $31.10 from 8 brokers. Shares are trading today at $20.34, for an implied gain of $10.76, or 53%. Cameco’s forward P/E is 14.97 and the company pays a dividend yield of 1.8%. The stock’s 52-week trading range is $16.68-$44.81, and at today’s price that’s about 22% above its 52-week low and 55% below the 52-week high. Cameco is the world’s largest uranium miner, and falling uranium prices have hit the company hard since prices hit a peak in January of around $72/pound. Uranium now sells for about $52/pound, a drop of -28%, and that drop has been exacerbated by lower demand. Falling demand and price have had even harsher impacts on the smaller uranium miners. At this time, Cameco does not expect the rest of the world to follow the Japanese and German governments’ restrictions on nuclear energy.

Denison Mines Corp. (AMEX: DNN) has a median target price of $2.21 from 7 brokers. Shares are trading today at $1.49, for an implied gain of $0.72, or 48%. Denison’s forward P/E is negative and the company does not pay a dividend. The stock’s 52-week trading range is $0.81-$4.52, and at today’s price that’s about 84% above its 52-week low and 67% below the 52-week high. Denison sold just 167,000 pounds of uranium in the third quarter, compared with 706,000 pounds in the same period a year ago. That cost the company nearly $3 million in revenues, and total revenues were less than half those of a year ago.

Uranium Resources, Inc. (NASDAQ: URRE) has a median target price of $5.00 from a single broker. Shares are trading today at $1.10, for an implied gain of $3.90, or 355%. Uranium Resources’ forward P/E is negative and the company does not pay a dividend. The stock’s 52-week trading range is $0.52-$3.98, and at today’s price that’s about 112% above its 52-week low and 72% below the 52-week high. The company reports earnings on Monday, but even the single broker with a target price can’t be bothered to offer estimated results for the company. The implied gains here are strictly fantasy.

Uranerz Energy Corp. (AMEX: URZ) has a median target price of $5.49 from 3 brokers. Shares are trading today at $2.04, for an implied gain of $3.45, or 169%. Uranerz’s forward P/E is 12.22 and the company does not pay a dividend. The stock’s 52-week trading range is $1.17-$5.93, and at today’s price that’s about 74% above its 52-week low and 66% below the 52-week high. Uranerz, like Uranium Resources, sports a stupendously high implied gain because it is so weak. These two might be prime candidates for the loser in the bidding war over Hathor.

Uranium Energy Corp. (AMEX: UEC) has a median target price of $4.98 from 6 brokers. Shares are trading today at $3.14, for an implied gain of $1.84, or 59%. Uranium Energy’s forward P/E is 2.78 and the company does not pay a dividend. The stock’s 52-week trading range is $2.20-$7.48, and at today’s price that’s about 43% above its 52-week low and 58% below the 52-week high. Uranium Energy just committed to pay about $85,000 in cash and about $940,000 in restricted stock at today’s price for a uranium mining project in Arizona. That sent the share price down slightly, which is probably less than should have happened.

UR-Energy, Inc. and (AMEX: URG) has a median target price of $2.37 from a single broker. Shares are trading today at $1.10, for an implied gain of $1.27, or 115%. UR-Energy’s forward P/E is negative and the company does not pay a dividend. The stock’s 52-week trading range is $0.75-$3.37, and at today’s price that’s about 47% above its 52-week low and 67% below the 52-week high. UR-Energy does not yet produce anything, as its Wyoming mine is still in development. The company has spent a total of about $116 million since 2004, and is looking to begin production in the second quarter of 2013. It’s anyone’s guess what the price of uranium will be then.

USEC Inc. (NYSE: USU) has a median target price of $3.38 from 2 brokers. Shares are trading today at $1.91, for an implied gain of $1.47, or 77%. USEC’s forward P/E is 10.11 and the company does not pay a dividend. The stock’s 52-week trading range is $1.17-$6.35, and at today’s price that’s about 63% above its 52-week low and 70% below the 52-week high. USEC mailed notices to its 450 centrifuge workers in late October informing them that the company may begin laying off workers in the first two weeks of November. When it released third-quarter earnings last week, the company posted a smaller-than-expected EPS loss, but missed revenues by a mile.

General Electric Co. (NYSE: GE) has a median target price of $20.00 from 14 brokers. Shares are trading today at $16.32, for an implied gain of $3.68, or 23%. GE’s forward P/E is 10.39 and the company pays a dividend yield of 3.7%. The stock’s 52-week trading range is $14.02-$21.65, and at today’s price that’s about 16% above its 52-week low and 25% below the 52-week high. GE doesn’t specify exactly what part of its revenues come from nuclear plants, but it maintains partnerships with Japan’s Hitachi and Toshiba for building and servicing nuclear plants around the world.

Shaw Group, Inc. (NYSE: SHAW) has a median target price of $27.00 from 13 brokers. Shares are trading today at $24.21, for an implied gain of $2.79, or 12%. Shaw’s forward P/E is 9.46 and the company does not pay a dividend. The stock’s 52-week trading range is $18.98-$41.62, and at today’s price that’s about 28% above its 52-week low and 42% below the 52-week high. Known primarily as a heavy construction company, Shaw owns a piece of Toshiba’s nuclear operations in both the US and the UK, as well as a 20% stake in Toshiba’s Westinghouse nuclear operations. The company is building  four nuclear units in the US and holds a services contract on four more new plants in China. For the fiscal year ended in October, Shaw’s nuclear work helped cover revenue shortfalls in coal plants.

Paul Ausick

Every US company involved in the nuclear fuel business is getting beaten up this morning. Uranium Resources, Inc. (NASDAQ: URRE) is down nearly -12% and Uranium Energy Corp. (AMEX: UEC) is down -4%. Ur-Energy Inc. (AMEX: URG) is off nearly -11% and Uranerz Energy Corp. (AMEX: URZ) is off nearly -5%. The disaster at Japan’s Fukushima Daiichi power plant following the March earthquake and tsunami has essentially killed investor enthusiasm for uranium stocks.

In USEC’s case, the federal government had delayed approval for a conditional loan guarantee for $2 billion to complete construction of its centrifuge project in Ohio. The US Department of Energy is seeking additional information before reaching a decision. USEC has told investors that unless the loan guarantee shows some signs of moving toward approval, the company may have to ultimately discontinue its operations. And a possible shutdown could happen within weeks, not months.

The federal government and the Obama administration re-iterated support for nuclear power shortly after the Japanese disaster, but both remain cautious about making any high visibility moves too soon. Especially moves that indicate on-going support for nuclear power development.

That’s why all the uranium stocks are getting a beating today. Investors have no reason to believe that federal support will be forthcoming for the nuclear industry in the US, and, like so many non-hydrocarbon-based energy projects, lack of federal government support equals the kiss of death.

The other uranium stocks are all miners, but if there is no support for new nuclear development, then the value of these stocks will drop as well. Aside from early comments supporting nuclear power, the US has been non-committal, whereas Germany and Italy have both indicated that no new nuclear plants will be built and, in Germany, existing plants will be closed over the next decade or so.

Just before noon USEC shares are trading down nearly -15%, at $2.04, having set a new low for the 52-week range of $2.03-$6.35. Uranium Resources shares are off -14%, at $1.11, within a 52-week range of $0.50-$3.98, while Uranium Energy shares have come back slightly to $2.94, off -2%, in a 52-week range of $2.40-$7.48. Ur-Energy shares are down -12%, at $1.32, in a 52-week range of $0.80-$3.37, and Uranerz shares are down nearly -7.5%, to $2.41, in a 52-week range of $1.10-$5.93.

The Global X Uranium ETF (NYSE: URA) holds assets in all these stocks and is off nearly -6% today, at $10.57, a new 52-week low with 52-week high of $22.42.

Paul Ausick

The loan guarantee program for USEC has been nothing short of a mess and this has been an ongoing issues for far too long.  USEC was also a victim of the nuclear backlash after the quake and subsequent tsunami in Japan that took out the nuclear reactor and sent governments scrambling over how they would treat their existing nuclear policies.

USEC said in the press release that it “expects to work with DOE to complete the loan guarantee review process and obtain a decision from DOE on the conditional commitment by the end of July 2011.”  It is trying to conclude the review process for its loan guarantee application, but so far it has not been able to conclude the conditional commitment process.  Today, June 30, was supposed to be the outside date for the next stage of the Toshiba and B&W investment and the standstill agreement provides some additional time needed for the Department of Energy to complete its review and to finally reach a decision during July.

Toshiba, B&W and USEC each had the right to terminate its obligations under the agreement if the $50 million second phase of the strategic investment by Toshiba and B&W did not close by June 30, 2011. This conditional commitment for the loan guarantee by the Department of Energy is called “the key remaining condition to closing of the second phase of the Toshiba and B&W investment.”  The companies have agreed not to exercise its right to terminate the Securities Purchase Agreement prior to August 15, 2011. This standstill provides a limited additional period of time to finalize and enter into the DOE conditional commitment and then close the second phase of the strategic investment.

We noted earlier that this has been going for too long.  USEC applied back in 2008 for a $2 billion loan guarantee from the Department of Energy so that it could construct the American Centrifuge Plant in Piketon, Ohio.  The company now says this will support approximately 8,000 U.S. jobs during the construction phase and will ultimately provide low enriched uranium to fuel nuclear power reactors in the United States and internationally.  USEC has already invested somewhere around $2 billion to date in this project alone.

USEC shares are currently up about 10% at $3.50 and the 52-week trading range is $2.97 to $6.35.

JON C. OGG

Areva made our list of the 25 most important alternative energy companies back in October.

Lauvergeon has turned Areva into a vertically integrated nuclear power provider that did everything from mining uranium to re-processing spent fuel. She was also making some effort to bring Areva into the renewable energy market. Her replacement is not expected to tear apart the one-stop shop Lauvergeon created, even though it is not popular with some of Areva’s board members.

But the story is not so much one of personality as it is one of vision. Under Lauvergeon, Areva competed with GE and the others to come up with a nuclear plant design that could be as easily replicated as a Big Mac. Instead of designing every plant from scratch, the big idea was to put together a kit that could be scaled as needed for a particular application. Such a plant could cut design costs, simplify regulatory approvals, and reduce construction costs.

Now, though, new designs probably don’t matter. The continuing disaster in Japan has cooled, if not killed entirely, the construction of new nuclear power plants. Germany and Italy have both decided to stop new construction, and Germany will close all existing plants over the next 11 years. Even China is re-considering its vast commitment to new nukes in light of events in Japan.

Alt-energy generation may be reaching a tipping point as solar PV is getting close to pricing parity with fossil-fuel generation during peak demand periods and new grid storage is being developed to deal with the intermittency problems of both solar and wind generation. Nukes are terribly expensive and have a terrible public image, even worse than coal. Coal may lower our quality of life, but nukes can wipe us all out.

Another issue that works against nukes is the growing tendency of power generation to be distributed among many smaller plants rather than one large centralized plant. What’s going on here is something akin to the network effect we’ve all come to see in the technology world. As the network (in the case of power, the grid) gets better, more things can be and are connected to it, making the network both more valuable and cheaper.

Large power generators will survive only by getting larger and spreading their geographic footprint. In the US, mergers and acquisitions in the utilities sector are growing as the big utilities like Excelon Corp. (NYSE: EXC) and Duke Energy Corp. (NYSE: DUK) spend billions to expand by buying up other big utilities. Ultimately though, even this strategy will have to change as the network effect of distributed generation will gradually overtake the traditional centralized generation model.

Areva is, to coin a phrase, too big to fail — at least anytime soon. The same is true of the other nuclear plant builders and many of the utilities as well. Somehow though, it seems like all they’re doing is re-arranging deck chairs on the Titanic.

Paul Ausick

The Wall Street Journal noted Merkel’s need of 10 to 20 gigawatts of fossil capacity need to be built over the next decade.   Those 20 gigawatts are essentially equal to the amount of electricity Germany currently generates from its 17 nuclear plants. And these 20 gigawatts will be built in addition to another 10 gigawatts already under development and set to be completed by 2013.

Whether Germany builds new fossil fuel plants or new solar or wind plants, the country’s electricity grid needs to be upgraded. Germany is expected to spend at least 9.7 billion euros to build more than 2,200 miles of cables to connect new generation capacity with consumers. This project is a real boon to infrastructure providers like ABB Ltd. (NYSE: ABB), Siemens AG (NYSE: SI), Schneider Electric S.A. (OTC: SBGSY), Alstom SA (OTC: ALSMY) and General Electric.

Other companies that could benefit from Germany’s need for an improved grid is American Superconducter Corp. (NASDAQ: AMSC), which makes high-efficiency superconducting wire used for electricity transmission, and General Cable Corp. (NYSE: BGC).

There are also two relatively small ETFs that offer a investment opportunity in the buildout of the global energy grid. The larger of the two is First Trust NASDAQ Clean Edge Green Energy Index Fund (NASDAQ: QCLN), which tracks the NASDAQ Clean Edge Green Energy Index. The fund’s largest five holdings are National Semiconductor Corp. (NYSE: NSM), Linear Technology Corp. (NASDAQ: LLTC), First Solar, ON Semiconductor Corp. (NASDAQ: ONNN), and Cree, Inc. (NASDAQ: CREE). QCLN’s net assets total $37.2 million, and it’s year-to-date return is negative, at -2%. Since its creation in February 2007, the fund’s NAV has declined by -4.01%. Shares are lightly traded and opened today at $14.85, within a 52-week range of $12.93-$18.39.

The even smaller grid fund is the First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (NASDAQ: GRID). The fund’s five largest holdings are Red Electrica Corp. S.A., NGK Insulators Ltd., Prysmian SpA, Schneider Electric, and Quanta Services, Inc. (NYSE: PWR). The fund seeks returns equal to the NASDAQ OMX Clean Edge Smart Grid Infrastructure Index before expenses. The fund was created in November 2009 and its lifetime NAV is 12.66%. The fund’s net assets total just $27 million, and like QCLN, it is very lightly traded. The shares opened today at $32.06, within a 52-week range of $26.84-$35.82.

Building out the global grid is likely to cost $500 billion.  And much of the work hasn’t even started yet. Germany’s shift away from nukes forces the country to upgrade its grid, whether it wants to or not. This is definitely something worth watching.

Paul Ausick

In addition to the PowerShares fund, we’ll take a quick look here at the Guggenheim Solar ETF (NYSE: TAN), Market Vectors Global Alternative Energy ETF (NYSE: GEX), iShares S&P Global Clean Energy Index Fund (NASDAQ: ICLN), and Market Vectors Solar Energy ETF (NYSE: KWT).

PowerShares WilderHill Clean Energy (NYSE: PBW) is a non-diversified index tracker. The largest of its 58 holdings is SunPower Corp. (NASDAQ: SPWRA) at 3%, followed by Tesla Motors Inc. (NASDAQ: TSLA), GT Solar International Inc. (NASDAQ: SOLR), Sociedad Quimica y Minera de Chile S.A. (NYSE: SQM), and Polypore International Inc. (NYSE: PPO). The fund’s market value is $448.7 million, and its 52-week range is $7.98-$11.42. PBW’s NAV is 9.00.

Guggenheim Solar ETF (NYSE: TAN) invests at least 90% of its assets in  stocks included in the MAC Global Solar Energy Index. It’s top five holdings are First Solar Inc. (NASDAQ: FSLR) at 14.38%, Hong-Kong listed GCL Poly Energy Holdings Ltd. at 8.99%, Meyer Burger Technology AG (OTC: MYBUF), Trina Solar Ltd. (NYSE: TSL) at 5.3%, and SunPower Corp. (NASDAQ: SPWRA). Assets under management total $165.2 million and the NAV at June 7th was $7.12. The 52-week range is $6.12-$9.16.

Market Vectors Global Alternative Energy ETF (NYSE: GEX) tracks the price and yield performance of the Ardour Global Index, and invests at least 80% of assets in stocks included in that index. The fund’s top five holdings are First Solar at 8.8%, Vestas at 8.37%, Cree Inc. (NASDAQ: CREE) at 6.21%, Enel Green Power SpA at 6.1%, and Iberdrola Renovables SA at 5.73%. The fund has $140.3 million of assets under management and its NAV is $19.22. The shares’ 52-week range is $17.81-$22.76.

iShares S&P Global Clean Energy Index Fund (NASDAQ: ICLN) tracks the price and yield performance of the S&P Global Clean Energy Index. The top five holdings are Germany’s Verbund AG (OTC: OEZVF) at 5.58%, Iberdrola Renovables at 5.47%, Empresa Nacional de Electricidad S.A. (NYSE: EOC) at 5.46%, China Longyuan at 5.44%, and SunPower at 5.4%. The fund’s net assets total $71.1 million and the NAV is $16.54. The shares’ 52-week range is $14.09-$19.00.

Market Vectors Solar Energy ETF (NYSE: KWT) is an index tracker for solar energy companies. It’s top five holdings are First Solar at 9.54%, MEMC Electronic Materials Inc. (NYSE: WFR) at 8.89%, Trina at 8.54%, SunPower at 6.35%, and Norway’s Renewable Energy Corp. ASA at 6.07%. The fund’s assets under management total just $29 million and its NAV is $10.55. The shares’ 52-week range is $9.04-$14.33.

Many of these funds (and their components) are down considerably and they are down so much against the 2008 peak-energy highs that many investors would rather not be reminded.  24/7 Wall St. has maintained for quite some time that many alternative energy investments may really just be leveraged oil bets in disguise.  These have not even lived up to that universally when oil rose.  Now investors will hope that the decommissioning of nuclear plants can be the next frontier for growth.  If not, global austerity measures may force solar projects to actually be evaluated on their real underlying costs basis just like other projects.

Paul Ausick

Germany was expected to add about 5,000-6,000 megawatts of new solar PV generation in 2011, down from about 7,000 megawatts in 2010. Then came the decision by the government to phase out all of Germany’s nuclear generation capacity over the next 11 years.

Germany’s nuclear generation capacity is just over 20,000 megawatts. The German government had anticipated growing the country’s solar generation capacity by 32,000 megawatts by 2020, but the loss of the nuclear generation is expected to increase that number significantly.

Under the subsidy plan adopted last year, the government was expected to cut solar subsidies twice a year, once at a base rate of at a variable rate established annually and a second time by an amount to be determined by the amount of new installations. The base rate cut for 2012 is set at 9%. For the second subsidy cut in 2012, the government was expected to slash incentives by another 6%.

Germany has now cancelled the scheduled 6% cut, which would have been effective in March 2012. For 2012, then, a cut of 9% in solar subsidies is planned, instead of a 15% cut. Subsidies were cut 16% for 2011.

Germany also caps the amount of new solar it will fully subsidize in any single year at 3,500 megawatts. New installations between 3,500-7,500 megawatts suffer a further cut of 3%. Above 7,500 megawatts, a maximum cut of 24% has been proposed.

To add 52,000 megawatts of solar generation in 11 years represents an annual total of about 4,300 megawatts. This is well within Germany’s capability, as it’s only 800 megawatts above the country’s minimum annual goal of 3,500 megawatts. And all the new capacity could easily come from solar PV.

Paul Ausick

Following the disaster at Japan’s Fukushima Daiichi nuclear power plant, Germany shut down seven of its oldest nuclear power plants until they could be inspected. Now those plants, and the other 10 in Germany’s nuclear fleet will all shut down by 2022.

The impact on uranium stocks has been immediate and ugly. Uranium Energy Corp. (AMEX: UEC) shares are down nearly -6% this morning, to $3.11, within a 52-week range of $2.11-$7.48. Ur Energy Inc. (AMEX: URG) shares are off nearly -8%, to $1.66, in a 52-week range of $0.73-$3.37. Uranerz Energy Corp. (AMEX: URZ) shares are off -8.5%, to $3.12, in a 52-week range of $0.87-$5.93. Uranium Resources, Inc. (NASDAQ: URRE) is down more than -4%, to $1.86, in a 52-week range of $1.82-$3.98.

Other companies that could feel some pressure from Germany’s decision include General Electric Co. (NYSE: GE), Toshiba/Westinghouse, and France’s Areva SA (OTC: ARVCY).

Germany’s decision follows a similar decision last week by Switzerland’s government. It’s hard to determine what part of the decision is driven by political concerns, but Germany’s ruling political coalition has come under heavy attack for its pro-nuclear stance and recently has suffered some electoral defeats that have been attributed at least partly to the coalition’s tolerance for nuclear power.

Germany’s nuclear 17 plants generate about 23% of the country’s electricity, whereas Swiss nukes produce about 40% of that country’s electricity. The Germans plan to cut electricity consumption by 10% by 2020 and to double the share of renewable generation to 35% in the same period. Germany’s nuclear operators include RWE AG, E.ON AG, EnBW Energie B-W, and Sweden’s Vattenfall. None is likely to accept the new policy without a fight.

The Obama administration has reiterated its commitment to nuclear development and Japan has said that it would increase its investment in renewables, but would continue to rely on nukes for the immediate future.

News of Germany’s decision lit a fire under most solar PV stocks today, as expectations for more demand from Germany have surfaced. Solar PV maker JA Solar Holdings, Co., Ltd. (NASDAQ: JASO) shares are up almost 6.5%, to $6.03, in a 52-week range of $4.22-$10.24.  First Solar Inc. (NASDAQ: FSLR) shares are up about 2%, to $123.53, in a 52-week range of $100.19-$175.45. LDK Solar Co., Ltd. (NYSE: LDK) shares are up more than 7%, to $7.53, in a 52-week range of $4.97-$15.10. Suntech Power Holdings Col., Ltd. (NYSE: STP) shares are up more than 5%, to $8.47, in a 52-week range of $7.05-$11.41. Yingli Green Energy HOlding Co. Ltd. (NYSE: YGE) shares are up almost 6%, to $9.26, in a 52-week range of $8.20-$14.29. Trina Solar Ltd. (NYSE: TSL) shares are up nearly 4%, to $22.85, in a 52-week range of $15.09-$31.89. The Guggenheim Solar ETF (NYSE: TAN) is up more than 5%, to $7.45, in a 52-week range of $6.02-$9.34.

The boost to solar stocks follows a report last week from IMS Research predicting that European solar PV installations will “fall considerably in the next 3-5 years.”  The research was completed before either Switzerland or Germany announced their exit from nuclear generation. And IMS does not take at face value any government’s promises for increases in solar PV installations.

In Germany, the decision to eliminate nuclear generation should lead to an increase in solar PV installations by the country that once led the world in new solar capacity. But will the country re-adjust its feed-in tariffs upward again to attract investment? Or will it decide that with the elimination of nuclear power, new solar capacity will have to stand on its own regarding pricing? Or will the nukes be replaced by coal- or gas-fired generation?

Germany can probably afford to boost its incentives for solar PV back to near previous levels. It may be, though, that the government chooses to let solar PV generation stand on its own, calculating that lower consumption and falling panel prices will help even out prices. The country could also more rigidly apply carbon emissions limits and boost carbon pricing, making coal or gas more expensive.

From a policy perspective, Germany’s decision to give up nuclear power could be a real game changer. If the country can cost-effectively replace its nuclear generation with renewables, it might be that anything’s possible.

Paul Ausick