Solar Energy Initiatives, Inc. (OTC:SNRY) Receives Government Grant

Solar Energy Initiatives, Inc. (OTC:SNRY) hoped for the 22% rally, as the solar company received $704 thousand grant from the federal stimulus package.

The funds cover nearly half the $1.5 million costs of the planned rooftop solar array, which should be built on their facility in Kingstree. The money came from South Carolina Industrial Energy Projects Grant Program, that is in support of industrial businesses and energy efficiency promotion initiatives in South California.[BANNER]

Before receiving the grant, Solar Energy Initiatives had barely any cash left in the bank and a heavy, inventory weighted balance sheet. These new funds will allow the company to actually proceed with the installation works, although some additional cash might be raised through stock issuing, a common practice of SNRY.

The stock reaction was naturally positive, but the rally will likely be short lived as the company is yet to file its quarterly report, prohibiting extensive price rallies beforehand. Another issue is that SNRY is late with that report.

The new funds will make their balance sheet look better, but the actual solar project will take time to proceed with and will thus have hardly any effects on top and bottom lines. With its current growth rate, the company is still far from profitability, explaining the low price of their stock.

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