Australian renewable energy company CBD Energy plans to buy Westinghouse Solar Inc in an all-stock deal to enter the emerging North American solar market, the US solar power systems maker said on Thursday.

CBD Energy, Westinghouse Solar's second-biggest shareholder with a 10.39 per cent stake, will own 85 per cent of the combined company once the deal likely closes in the third quarter.

"The United States is forecast to be one of the largest markets for solar energy generation in the next few years. Consequently, CBD has been looking for a point of entry into the US market for some time ...," CBD Energy Chief Executive Gerry McGowan said.

United States and India are expected to offset falling solar demand in top market Europe, where cutbacks on renewable energy incentives and a weak economy have led to an oversupply.

CBD Energy, which last month bought its current stake in Westinghouse Solar for 60 cents per share, expects the deal to add to its earnings once it closes and throughout 2013 fiscal year.

Westinghouse Solar shares, which have lost about two-thirds of their value in the past one year, closed at 76 US cents on Wednesday on the Nasdaq. CBD Energy shares closed at 8 Australian cents.

Westinghouse Solar also said CBD Energy intends to apply for listing on the Nasdaq Stock Exchange prior to the closing of the deal.

Chardan Capital Markets is advising CBD.

Separately, Westinghouse said its fourth-quarter net loss from continuing operations narrowed to $1.2 million, or 9 cents per share, from a loss of $1.3 million, or 12 cents per share, last year.

Excluding items, it lost 13 cents per share.

Revenue dipped to $3.3 million.