LOS ANGELES (Reuters) - Tuesday’s election results sent a mixed message on alternative energy, with Republican victories in Congress likely to curb national alternative-energy policy while California results look set to help the sector.

A voter leaves her polling station during midterm elections, in Mason, Ohio November 2, 2010. REUTERS/Matt Sullivan

Shares reflected the confusion, with solar stocks mostly down in the morning but recovering in late afternoon. First Solar finished flat while SunPower Corp rose 1.3 percent, Suntech Power rose 2.5 percent and JA Solar firmed 3.5 percent.

Big Republican wins in the House of Representatives make it unlikely that a bill to curb emissions from fossil fuels or establish renewable-energy goals will make it through Congress.

But in California, clean-energy policies apparently struck a chord with voters, who handed the governorship to Democrat Jerry Brown, a strong proponent of cutting emissions and boosting alternative-energy industries.

California voters also trounced a ballot initiative that would have suspended clean-energy goals until unemployment fell sharply. With 93 percent of precincts reporting, 61 percent of voters had rejected the measure, known as Proposition 23.

The victory in California, the nation’s most populous state and by far its biggest market for renewable energy, helped compensate for disappointments at a national level.

The results ensure “that California and the entire United States will continue to grow the clean industries and reclaim leadership in the world,” said Rhone Resch, head of the Solar Energy Industries Association.

“I would expect in the next two years that you will see the U.S. becoming the largest solar market in the world, surpassing Germany, China and other countries,” he added.

The U.S. renewables sector employs about 93,000 people, a figure that SEIA has predicted would grow by at least 26 percent next year. Resch said the number of jobs could double thanks to growth in California.

SHADOW REMOVED

The threat of California’s Proposition 23 had cast a shadow over the clean-energy sector, throwing into jeopardy a policy that the state’s public utilities draw 33 percent of their energy from renewable sources by 2020. Passage of the measure could have allowed utilities to slow plans to ink contracts with solar and wind developers.

With the mandate for the 33 percent clean-energy goal now clear, it could trigger more business for solar-power developers as utilities gear up to meet it. The clarity will also help developers win financial backers.

“When you have a clear policy environment, it makes it a lot easier to find investors,” said Arno Harris, chief executive officer of Recurrent Energy, a developer of solar plants that has agreed to be taken over by Sharp Corp.

“What we’ve seen time and time again is that investors and lenders really want to see from a firm policy standard.”

New agreements could be announced in the next few months, industry veterans say.

The wide margin of defeat gives lawmakers and regulators something of a mandate to go further, according to John Cheney, chief executive of Silverado Power LLC, a solar power developer.

“What this does is put immediate pressure on increasing the renewable energy standard,” he said. “It will eventually go much higher than 33 percent.”

A potential hiccup lies in California’s Proposition 26, which was approved by voters and requires a two-thirds majority to pass various fees, levies and charges that would be declared taxes. But it is unclear how big an impact the proposition will have on clean energy.

Critics say the measure could affect the carbon cap-and-trade plan that the state’s Air Resource Board released last week, by forcing the state to set up the trading of carbon permits under the plan in a way that wouldn’t count as a tax under Proposition 26.

But Mary D. Nichols, who heads the board, said in a statement that the proposition doesn’t impair the state’s 2008 plan for reducing greenhouse gases or any regulations developed under the plan. Those regulations include the proposed cap-and-trade plan.

California is part of a group of 11 states and Canadian provinces known as the Western Climate Initiative. Members are supposed to start regional carbon trading in 2012.

New Mexico’s participation in the carbon-trading plan is being thrown into question after the victory of Republican Susana Martinez in the governor’s race. She opposes the cap-and-trade plan.

In California, an area where developers are seeking clarification is on how much renewable energy California utilities will be able to purchase from out-of-state plants, like those planned for just over the border in Arizona and Nevada, where costs are cheaper.

That issue will likely be hammered out by legislators in coming months, industry analysts say.