Are Solar Stocks a Wise Investment Choice?

Many of us who strive to live a relatively green life sometimes feel left out when we see others making big bucks with their stock market investments. Not that we green folks are rolling in the dough, but what if we wanted to play the numbers a bit ourselves, just for chuckles? It seems that no matter what portfolio you may be interested in, you will see that the top investment options are oil, gas and nuclear energy companies. Yikes! What is a green investor to do?  Why, invest in solar stocks, of course.

There’s only one problem

The current stock news headlines. The spectacular nosedive taken by Solyndra Solar down the bankruptcy hole, along with $.6 billion of our hard-earned tax dollars, has most certainly send a chill down the spine of even the most intrepid alternative energy investor. Solar power stocks are taking a beating right now, for sure. Will this, too, pass as other stock downturns have? Probably. But, then we remember the other solar panel manufacturers who went belly up not long before Solyndra, namely Evergreen Solar and SpectraWatt. Is it madness to even consider these solar energy stocks as part of a green portfolio?

The solar stock news is all over the place.

Some analysts forecasting doom and gloom for the American solar industry while others seem to consider this current state of affairs as nothing more than a blip on the solar energy stock screen. In the Solyndra case, the ick factor has been added to the mix with the knowledge that it was not simply a business venture gone bust, but a failure fast-tracked by corruption. Somehow, we accept shady business practices by oil and nuclear entities, but hold alternative companies to a higher standard. In the other two cases, however, bankruptcy seems to have been caused more by plummeting prices for panels and the actions of Chinese solar manufacturers. These factories are heavily subsidized by the Chinese government and are flooding the global market with panels manufactured at high environmental costs, as is the case with JinkoSolar. The pollution at this company’s plant became so pervasive that even Chinese government officials were forced to take notice, and close it down. Unfortunately for Massachusetts taxpayers, Evergreen was also the recipient of taxpayer money, which was also flushed down the toilet along with the company’s business plan.

Despite all this, some analysts are saying that solar stocks are a good buy. An article published yesterday (9/22/11) on the Energy & Capital website sings the praises of First Solar stock, despite a New York Times report that this company will be unable to meet its loan guarantee requirements for its California solar farm plans with the Department of Energy by the September 30 deadline. Although First Solar is supposedly pursuing other financial models for its ambitious Topaz solar installation, this latest development casts a pall over the entire U.S. solar industry.

In The Street’s estimation of the best solar stocks, Chinese-owned Trina Solar is the number one solar company to watch, and Yingli Green Energy Holding is the second. What of American solar manufacturers, you ask? Well, SunPower is rated number six, with its stock price expected to rise nearly 66% in the next year. A press release earlier this week (9/21/11) noted that six teams taking part in the DOE’s Solar Decathlon used this company’s high efficiency solar panels in their green house designs. Our neighbors to the north, Canadian Solar, also made the grade, with their price per share forecast to jump almost 80% within the next 12 months.

So, what’s a green investor to do?

Even with all the recent disappointments in the North American solar market, there seem to be at least a couple of gems to admire and watch. notes that, dire reports aside, the U.S. solar energy market is exhibiting an upward trend with solar installations up a whopping 69% in 2011 from the previous year. Not only that, but the increase is fed by commercial demand rather than residential, meaning that projects are usually on a much larger scale. Before embarking upon any investment scenario, do your due diligence in order to understand fully the avenue you are exploring. That being said, the hunger and need for alternatives to fossil-based energy products can only mean more, rather than less, demand for solar power in the long term.