Several think tanks in the U.S. are pushing for an overhaul of the subsidy programs which provide incentives for solar and other clean energy initiatives. The proposal, which is getting support from Republican lawmakers and some industry groups, calls for only temporary support for the solar industry. 
The subsidy program aims to push companies to reduce costs over time and make the technologies competitive. The U.S. is becoming an important market for solar energy and installations are expected to show robust growth in 2012. The country accounts for a significant portion of revenues for Trina Solar (NYSE:TSL) and Yingli Green Energy (NYSE:YGE).
We have a $9.85 price estimate for Trina Solar, which is about 45% ahead of its current market price.
The U.S. government has tried to boost the clean energy industry with tax incentives and subsidized loans for companies. The new plan proposed by the Breakthrough Institute and two other think tanks is pushing for a change in the methods of administering that support.  With many of the present support programs set to be phased out in the near future, the proposed plan may gain political support. The plan calls for subsidies that will force companies to develop more efficient technologies and lower costs over time. It proposes reducing subsidies over time as technology improves.
European countries like Germany already have a sliding scale system that reduces support based on the capacity that comes online. Despite this, falling panel prices have resulted in excessive installations in these nations, prompting one-time reductions and measures to increase the frequency of subsidy reductions. With European governments pulling back support for solar, many players are looking to the U.S. as the next important market for solar equipment. Changes to the subsidy policies in he U.S. could have a major impact on the sales of panel manufacturers like Trina Solar.
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