UPDATE 1-RESEARCH ALERT-BofA starts solar power product makers

(Adds details on outlook)

Nov 6 (Reuters) - Banc of America Securities started coverage of six China-based makers of solar power product and said the availability and pricing of polysilicon, the primary feedstock for over 90 percent of solar modules, will remain a challenge in 2008 and beyond.

Lower cell and module prices versus comparative product from outside of China, substantially higher module supply and limited differentiation among Chinese manufacturers over a longer-term period could also pressure margins, it added.

BofA started China Sunergy Co Ltd (CSUN.O) with a "sell" rating, saying the company's 2008 silicon supply and pricing exhibits the greatest risk of all the U.S.-listed solar cell manufacturers.

The brokerage started Canadian Solar Inc (CSIQ.O), Solarfun Power Holdings Co Ltd (SOLF.O) and Yingli Green Energy Holding Co Ltd (YGE.N) with a "neutral" rating.

It started JA Solar Holdings Co (JASO.O) with a "buy" rating, saying it expects JA Solar to stack up well due to relatively strong visibility on silicon supply, scale advantage and low fixed costs.

It also started Trina Solar Ltd (TSL.N) with "buy" rating, saying it expects Trina to solidly compete with its solar peers due to its strategy of vertical integration, gross margin improvement in fourth quarter of 2007, and valuation.

The brokerage raised its price target on Suntech Power Holdings Co Ltd (STP.N) to $55 from $40. It said based on scale advantages, the company expects to lower its fixed costs from an industry low.

The following table gives the price targets and ratings:

COMPANY PRICE TARGET RATING

China Sunergy Co Ltd (CSUN.O) $6 Sell

Canadian Solar Inc (CSIQ.O) $12 Neutral

Solarfun Power Holdings Co Ltd $14 Neutral

(SOLF.O)

Yingli Green Energy Holding Co Ltd $37 Neutral

(YGE.N)

JA Solar Holdings Co <JASO.O $74 Buy

Trina Solar Ltd <TSL.N $76 Buy

Suntech Power Holdings Co Ltd $55 Neutral

(STP.N) (Reporting by Shamik Paul in Bangalore; Editing by Bernard Orr)