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.

Just this week we saw two Chinese Solar companies, Trina Solar (NYSE: TSL) and Solarfun Power (Nasdaq: SOLF), IPO on the NYSE and the Nasdaq, respectively. This follows the IPO of Canadian Solar Inc. (Nasdaq: CSIQ), which is really a Chinese company. Another Chinese Solar company, Yingli Solar, plans to list on the Nasdaq and has hired Goldman Sachs and UBS to handle its offering.

The Chinese solar market is very small and majority of these companies are taking advantage of their low cost manufacturing to sell their products to Europe and North America. The generous tax breaks in Europe and the incentives by some states in United States has led to a solar boom as the main obstacle to growth for a lot of these companies is securing enough polysilicon to boost production.

I personally would stay away from all of these stocks except for Suntech Power (NYSE: STP). I already own Suntech Power and consider it the best of breed. You can read my recent article on Suntech Power here. They are the largest in China and one of the largest in the world.

Anyway’s, how have all these IPO’s performed so far (Source: IPOHome):

Suntech Power (NYSE: STP): Up 119.8% since its IPO on 12/14/2005

Canadian Solar (Nasdaq: CSIQ): Down 34.1% since its IPO on 11/9/2006

Trina Solar (NYSE: TSL): Up 2.2% since its IPO on 12/19/2006

Solarfun Power (Nasdaq: SOLF): Down 20.3% on its opening day today.

Full Disclosure: I am long Suntech Power (STP)

I thought I keep adding to my list of positive news for Suntech Power Holdings (NYSE: STP).

10. Signs a multi-year supply contract with SunEdison company. Value of the contract is expected to be $50 million to $90 million over the term of the contract.

This contract win gives Suntech power more exposure to United States and in particular California. SunEdison is the largest solar energy services provider in North America, which is why I consider this a big win.

11. Suntech’s subsidiary MSK Corporation (which underperformed last quarter) signed a deal ARISE Technologies Corporation, to distribute the MSK Just Roof(TM) system in Canada.

12. Suntech Power’s CEO Shi Zhengrong was featured in an Op-Ed column (premium content) by Thomas L. Friedman in New York Times. Pretty good press for the company and its CEO.

13. Credit Suisse maintained its ‘outperform’ rating and upped its price target to $38 from $37.50.

Analyst A Chan of Credit Suisse, “the company has announced another sales contract, including the sale of modules worth $50-$90 million to the US in 2007-2009. The contract exhibits Suntech Power Holdings? ability to win new market contracts with better-than-anticipated ASPs, the analyst says. Credit Suisse expects the company to transition towards systems integration in order to sustain or boost its margins”. (via newratings.com)

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Following are the 9 positive things that I wrote about on November 24th in the article titled:

SunTech Power – Momentum seems to be building

1. Suntech Announces Contract to Supply World?s Largest Solar Power Plant in Spain.
2. China plans to build the world?s largest Solar power plant. We don?t know if Suntech Power is playing a role in this yet but its a pretty good bet that they will play a role.
3. Recently upgraded to ?Outperform? by Credit Suisse
4. Credit Suisse has a price target of $116.30 per ADR
5. Recently upgraded to ?Overweight? by Thomas Weisel.
6. Suntech already has ?Buy? ratings from Citigroup and Goldman Sachs
7. Citigroup has a price target of $52
8. Sunny outlook by Motley Fool. It?s also a ?Motley Fool Rule Breakers? recommendation.
9. Three recent positive articles on Suntech Power on SeekingAlpha by Average Joe Investor, Will Gabrielski and Daniele Guerini. Asif Suria, also picked Suntech Power in his August issue of SinLetter. Count me as another Seeking Alpha contributor who is bullish on this stock.

* I am long STP

The three reasons:

1.  More Government support
2.  Easing supply bottlenecks (Polysilicon)
3.  Growing Demand

The article mentions the following stocks:  Evergreen Solar (Nasdaq: ESLR), Sun Power (Nasdaq: SPWR), SunTech Power (NYSE: STP) and MEMC Electronics (NYSE: WFR).

Mark Cuban’s new blog Sharesleuth.com recently wrote an outstanding article on Xethanol. It is a must read if you haven’t already. You probably already know by now that the stock tanked on the day the article was published. Mark Cuban also admitted to shorting Xethanol based on the news that his blog uncovered. We will leave the ethical discussion on this for another day.

Anyways, I have been tracking Xethanol since about December of last year during its days on the OTCBB. However, I was skeptical about Xethanol back then and am still skeptical about it now (Although, when I think about it, I should have just bought Xethanol when it was about $2 stock in December). I did buy Pacific Ethanol (PEIX) back then and that worked out pretty nicely for me. I sold my PEIX shared a few months ago and currently don’t have any ethanol stocks in my portfolio.

If you look at my previous article you will see that I attended a luncheon by Xethanol in Atlanta where they discussed their plans of expanding in the South-East and specifically Georgia. I have provided a summary of the presentation and I would recommend everyone to read it. I didn’t provide any personal analysis on the company in that article, only the summary of the presentation. So why didn’t I buy any shares of Xethanol after meeting with the management team and listening to their presentation?

The reason is that I thought the stock was overpriced and the company still only had plans on the drawing board. There is still no new plant in the south-east or anywhere else for that matter except the ones they have in Iowa. They have a good business plan and strategy of locating plants near big cities on the east coast that will produce Ethanol from waste products. They even have a deal with PRAJ technology from making cellulosic ethanol in its new plants. By the way, Vinod Khosla, has an investment in PRAJ technology as well. More on that to follow soon. Anyways, if you look at all the press releases from early December you can see that Xethanol has really taken advantage of the ethanol boom. I am going to wait into buying Xethanol once they open a Cellulosic plant outside of the midwest. (That is if the stock price is reasonable at that time). If I invest in an ethanol company again it will have to be cellulosic ethanol producer and not corn based producer. There might be some short term trading opportunities in companies such as PEIX but I prefer cellulosic ethanol.

I do want to add that there might be some upside at this price point for Xethanol. If you are a trader you might want to give it a shot. As a long term investor you might want to wait until you see Xethanol producing cellulosic ethanol from one its planned east coast plants.

- Ethanol stocks

- Solar stocks

- Geothermal stocks

- Wind Energy stocks

- Fuel Cell stocks

- Nuclear Energy stocks.

I only have one wind energy stock listed there. Does anyone know of more Wind Energy stocks? I know about GE, but are there any others listed in the US?