For investors looking at solar stocks, the past few years have been a bumpy ride. Cheaper natural gas and coal prices, dwindling government subsidies along with a huge glut of photovoltaic panels caused the sun to set on solar stocks.
Share prices for sector plunged and many firms — including few industry stalwarts — actually had to file for bankruptcy protection.
What a difference a year makes.
Solar stocks have been on fire as several positive factors have propelled share prices to new highs. The solar stock benchmark — the Guggenheim Solar (TAN) — is up an astonishing 129%, and the bundle of sizzling solar stock is actually the number one performing equity exchange-traded fund this year.
Driving that outstanding solar stocks performance has been rising earnings at a few key producers of panels. However, for leading solar stocks First Solar (FSLR), SunPower (SPWR) and Canadian Solar (CSIQ), the key isn’t just how many panels are being sold … but who is doing the buying.
For FSLR, SPWR and CSIQ, the crucial point has been focusing efforts on grid-scale solar installations for utilities. As a result, these three solar stocks could be the best way to play the sector’s return to profitability now and into the future.