Top Stock Picks '09: SunPower (SPWRA)

"The sharp drop in oil prices is only a temporary situation, and we should not be lulled into thinking that $150-per-barrel oil won't return.

"On the contrary, the last run-up in oil prices was a warning signal indicative of what we will have to endure sometime within the next few years and beyond -- at least we will if we don't act now to change our energy consumption habits.

"Solar companies will get a boost in new models for energy conservation in the home and businesses. And the question really isn't if, but when?

"When will the catalysts be put in place, and which companies will be the biggest winners when the stimulus is triggered? The best strategy for this group is to stick with a few industry leaders, such as our top solar play, SunPower Corp.

"A few month ago, the U.S. government extended billions of dollars in tax credits for solar and other renewable sources of energy in its $700 billion financial bailout plan.

"The bill included an eight-year continuation of solar tax credits that will boost U.S. demand for solar energy and other renewables like wind, and create hundreds of thousands of jobs.

"The measure gives businesses a 30% tax credit to offset the development costs of solar and other clean energy projects, and eliminated a $2,000 cap on tax credits for residential solar systems.

"The subsidies narrow the cost gap for solar power to compete with electricity from dirtier, but cheaper, energy sources, such as coal and other fossil fuels.

"These tax credits will help stimulate demand for large-scale projects sought by utilities, a critical factor for driving down the costs of solar energy and expanding its market potential for the longer term.

"Now that utilities can take advantage of the tax credits, the solar power lobby expects a rapid explosion of big solar power installations, as power companies will buy solar-generated electricity from independent developers.

"SunPower has said it will add jobs to it U.S. operations because of the extension of solar power tax credits. The expansion would add hundreds of positions during the next 18 months to SunPower's current U.S. workforce of about 3,000. The company is also considering building a plant in the United States to manufacture solar modules.

"Meanwhile, polysilicon prices are dropping fast due in large part to a serious slowdown in the chip sector. Since polysilicon is the major ingredient in the making of solar cells, this is good news for solar companies."

Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.