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The measure, which is expected to be approved by the House of Representatives and President George W. Bush, gives businesses a 30 percent tax credit to offset the development costs of solar and other clean energy projects.
Industry experts had warned that failure to extend the tax credits that were to expire at the end of 2008 would hamper the growth of solar power, which remains more expensive than conventional electricity sources, such as coal and natural gas.
"We see this as an important catalyst for the entire solar and renewable energy sector, especially for solar names with residential exposure such as (SunPower)," analysts at Piper Jaffray wrote in a note to investors.
SunPower Corp is the solar market leader in North America. Other companies likely to see a boost include First Solar Inc, Suntech Power Holdings Co Ltd, Yingli Green Energy Holding Co Ltd, and Evergreen Solar Inc.
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