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With the high fuel prices over the past year, solar stocks have been making some nice gains. But there are some signs that they may not be as safe as they appear. Investors' interest in solar companies increased due to soaring crude futures, but there are some factors to take into account before investing money into solar.
The current BusinessWeek looks at stocks such as First Solar (NASDAQ: FSLR), SolarWorld and Evergreen Solar (NASDAQ: ESLR), which have been facing increased volatility based on contract deal news or the lack thereof.
A major impact came in May, with speculation that Germany would lower subsidies given to companies and individuals who install alternative energy equipment. But the cut was not as deep as expected and stocks rebounded nicely.
Among some good potential investments, analysts at Morningstar and Kaufman Brothers suggest companies such as Akeena Solar (NASDAQ: AKNS), which installs residential solar panels in the U.S., and First Solar and Evergreen, which manufacture thin-film panels. Applied Materials (NASDAQ: AMAT) and MEMC Electronic Materials (NYSE: WFR), which supply assembly materials to the solar panel outfits, are also put on the list as companies that could bring a lot of gains.
Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.
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