Auriga is out this morning with some notes on the solar industry after attending Intersolar in Munich, Germany.  The firm believes industry fundamentals remain strong with robust European demand being driven by attractive rates of return on solar projects.  They believe that as long as project returns are attractive, and both debt and equity financing remains available, demand for PV projects will continue to surprise versus the bearish outlook.

Here are more notes from the report out of Auriga:

– surprised investors getting 10% rate of return on solar projects in Germany in 2H10
– outside of Germany, rates of return even better (25% in Italy, 17% in Czech Republic)
– increasing worldwide PV forecast to 11.7GW and increasing 2010 forecast for Germany from 3.5GW to 5GW
– meetings with US, European and Asian module manufacturers indicate essentially all of 2010 production being allocated as orders remain strong
– despite big demand this year, not finding many companies that will increase capex for next year

The firm sees attractive valuations in several stocks at current levels and recommends considering its top rated names, all of which have Buy ratings:

First Solar (FSLR) First Solar Trend Analysis
Trina Solar (TSL) Trina Solar Trend Analysis
Yingli Green Energy (YGE) Yingli Trend Analysis
Solarfun (SOLF) Solarfun Trend Analysis