Solar Stocks – Where do we go from here?

There is no good way to put this but Solar Stocks have been beaten down pretty bad since 2008 rolled in. Now there was some irrational exuberance when it came to solar stocks in 2007. This downtrend was inevitable but the overall market conditions might have made it worse then it should have been.
Solar Stocks

Crude Oil and Solar Stocks are moving in the opposite direction with predictions that oil will continue to move higher.

The inability of congress to extend the renewable energy tax breaks beyond 2008 is also creating uncertainty even though most solar cell makers depend on European countries for majority of their revenues.

At some point you have to look at some of the quality solar companies.

I personally only consider four solar stocks worth investing (you can trade in other solar stocks) at this point:

  • Suntech Power (STP)
  • Sunpower Corp. (SPWR)
  • First Solar (FSLR)
  • MEMC Electronics (WFR)

All of these are quality companies and leaders in different categories:

  • Suntech Power (STP)- Biggest Solar company in China and one of the biggest pure play solar companies in the world. Suntech also has pretty considerable R&D and is not just a low cost Chinese solar cell producer.
  • Sunpower Corp (SPWR) – This silicon valley based company is a leader in solar cell efficiency.
  • First Solar (FSLR) – The leader in cost and doesn’t use polysilicon which continues to remain in short supply.
  • MEMC Electronics (WFR) – As long as polysilicon supply remains tight MEMC electronics will benefit.

One thing that remains certain is that solar stocks will continue to remain volatile. These stocks could go either up or down 20% a month from now. But unlike Corn Ethanol, Solar Cells are here to stay and the technology continues to advance.

I have made my fair share of mistakes in the past when it comes to Solar investing. I am currently trying to see if I can pick a bottom in Suntech Power and SunPower.

Full Disclosure: No position in any of the above listed stocks.

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