Evergreen Solar Inc. (NASDAQ: ESLR) shares are trading higher after the company announced it has started an expansion project to double the capacity of its Devens, Mass., plant to 160 megawatts by the end of next year. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on ESLR.

After hitting a one-year high of $18.85 in December, the stock hit a one-year low of $7.52 in March. ESLR opened this morning at $11.66. So far today the stock has hit a low of $11.10 and a high of $11.97. As of 12:30, ESLR is trading at $11.27, up $0.57 (5.3%). The chart for ESLR is bearish but improving, while S&P gives the stock a bullish 4 Stars (out of 5) Buy rating.

For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $7.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 16.3% return in just five and a half months as long as ESLR is above $7.50 at September expiration. Evergreen would have to fall by more than 33% before we would start to lose money.

ESLR hasn't been below $7.50 at all in the past year and has shown support around $9 recently. This trade could be risky if the prices for oil and other energies fall off some in the coming months, but even if that happens, that position could be protected by support the stock might find just above $7.50, where it bottomed out in the past month.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in ESLR.

What happens when a highly specialized industry begins to grow very quickly? Solar power, one of the fastest growing of alternative energy sources, relies on a system of very specific machinery to work successfully. But market growth has lagged behind demand due to a bottleneck in the manufacturing process -- in the production capacity of poly-silicon, a vital component in photovoltaic cell production.

I think the potential for a company that could help break-up that bottleneck could be really extraordinary, and that's why I'm recommending Meyer Burger (MBTN: Swiss Exchange) as one of my best picks for 2008.

Meyer Burger is a market leader in a small but incredibly important market, technology-wise -- the manufacturing of machines that contain highly precise saws for cutting silicon and other crystals for use in solar power, optics and semiconductors.

Chinese solar power manufacturer Trina Solar Limited (NYSE: TSL) is ablaze with double digit increases in net revenues, net income, operating income and the solar megawatt volume of units shipped. The company added 12 new customers in 2Q 2007 alone, and its manufacturing capacity is booked solid through the remainder of 2007. Good thing the company is in the midst of a tremendous manufacturing capacity expansion program. Currently, Trina Solar has a manufacturing capacity of 100 solar megawatts, set to increase by 50% to 150 solar megawatts by the end of 2007, and rise again to 350 solar megawatts worth of manufacturing capacity by the end of 2008. The sky really is the limit for Trina Solar.

Despite big increases in the cost of raw materials, Trina Solar's total net revenues in 2Q 2007 jumped 77% to $75.3 million, even though the average sales price dipped. Gross profit increased 49.5% to $14.2 million, and net income increased 51.4% to $7.2 million. Because Trina Solar is still in its start-up phase, operating expenses increased as did interest expense. Based on figures thus far reported in 2007, CEO Jifan Gao states FY net revenues will total $270-$200 million, and FY net income will be in the $34.5-$36.5 million range. Trina Solar has guaranteed contracts with suppliers for 90% of the necessary supply of polysilicon for 2007 orders, and 60% for 2008 orders. Trina Solar recently began dealings with various silicon reclamation companies to ensure a stable and moderately priced supply of necessary polysilicon to meet its present demand forecast.

In an odd state of affairs, most of Trina Solar's customers are in Germany, Italy, and Spain. The company does very little business in China. CEO Gao's remarks make no reference to this fact, only that climatic conditions and government policies make it easier to do business in southern European countries. Given China's unprecedented growth in demand for energy resources, one has to wonder why the Chinese government is so late coming to the solar-powered party.

There are a whole lot of things to like right now about Trina Solar Limited (NYSE: TSL), the Chinese manufacturer of solar modules. The stock opened the year at $18.86 and closed Wednesday, August 8, at $62.08. Not a bad run up. Yes, the company is basically a start up, being in production only since 2004, and investors must be able to tolerate a high level of risk with patience. But the company is expanding on a variety of fronts while still maintaining a healthy enough balance sheet. Trina Solar 1Q 2007 earnings release back in May indicated a very positive investment scenario (the 2Q release is scheduled for August 23).

Despite the fact that the 1Q figures pertained to the winter quarter, generally a slow time for solar technology companies, Trina Solar posted a 10% increase in net revenues, to $42.5 million, from the previous quarter, but a staggering 194% (not a typo) increase from 1Q 2006. Gross profits from the quarter increased 5.3% to $9.5 million, and net income increased 7.3% to $4.7 million. Bear in mind Trina Solar posted these figures despite higher prices for raw materials and a decline in per unit price. Demand for solar technology continues unabated. Trina Solar shipped 17% more units by volume in 1Q 2007 than in 4Q 2006. That increase in volume meant Trina Solar produced and shipped 300% more solar watts in 1Q 2007 than 1Q 2006, and has plans to accelerate increases in both unit and watt volume.

Trina Solar is still in a rapid expansion phase, as is only to be expected from a company dealing in newer forms of technology. The company recently completed testing on its new line of increasing efficient solar modules and plans to market these modules to new and existing customers in Germany, Spain and Italy. At full manufacturing capacity, Trina Solar expects to produce 50 million solar watts with this product line. CEO Jifan Gao forecasts that Trina Solar will ship 87-80 million watts worth of solar modules in FY 2008, generating net revenues in the $270-$300 million range. Perhaps the wider investment community will hear of Trina Solar during the 2008 Olympics in Beijing.

LDK Solar Co. Ltd (NYSE: LDK) is the second solar company from China to go public in the last month. I've been watching this company for quite a while, have been quite impressed by it, and I immediately picked up shares after the June 1 IPO.

In fact, I picked up shares much cheaper than I had expected. The timing of this IPO coincided with too many IPO's at one time and LDK rode into the storm of China's stock market downturn the following days. LDK offered 17.38 million shares at $27 and raised $469 million at its IPO. With the shares currently at $23.75, I see a bargain.

Based in Xinyu City, with an office in (appropriately named) Sunnyvale, California, the company manufactures
multicrystalline solar wafers. These are the raw materials used to make solar cells and modules, used to covert sunlight to electricity. Its technology for the production process is proprietary and the firm can utilize recycled and "scrap" polysilicon feedstock, giving it a leg up on competition and making it very quickly one of the leading manufacturers in the business. LDK also provides its proprietary wafer processing services to other manufacturers of multicrystalline solar cells.

In this day and age, we are all seeking alternative sources of energy, whether it is wind, wave or solar. Some
researchers claim that by 2070, over 50% of the alternative power generated will be solar in nature. LDK has demonstrated to me the early signs that it can succeed. Fast growing, its annual production capacity is projected to increase from the 215 megawatts of March 2007 to 400 megawatts by the end of 2007. By December 2008, the capacity is in line to grow to 800 MW. LDK has demonstrated an ability to grow quickly while maintaining (and increasing) terrific margins.

Of the nascent solar tech companies out there, the future of LDK shines brightly.

Type of stock: A manufacturer of multicrystalline solar wafers, the raw material used to make solar cells, this is a new and fast growing company based in China.

Price target: While the IPO was on the high end at $27, the stock has dropped to $23.85 so you can get in now at a significant discount to the company's intrinsic value. I think this is one that we could see hitting $40 within the year, based on its strong growth projections and proprietary, effective, and useful production process.

Hilary Kramer is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.

In the past few weeks, several friends have asked me if I have any ideas for alternative energy stocks. Although I follow the industry fairly closely, I replied that I do not. I don't think there's any doubt that alternative energy is the future, but as Anne Kates Smith wrote at Kiplinger.com, there are numerous questions surrounding exactly what that future will look like. Another thing for investors to remember: Counterintuitively, just because alternative energy is the future does not mean that investors will be able to make money with these stocks. Even though the internet was certainly the future in 2000, those stocks were a poor investment. Innovative technology does not always mean big profits. Warren Buffett (I used this same quote in a piece on internet video, an industry that suffers from many of the same questions) opined on this paradox, using the airline industry as an example:

Sizing all this up, I like to think that if I'd been at Kitty Hawk in 1903 when Orvile Wright took off, I would have been farsighted enough, and public-spirited enough -- I owed this to future capitalists -- to shoot him down. I mean, Karl Marx couldn't have done as much damage to capitalists as Orville did.

I won't dwell on other glamorous businesses that dramatically changed our lives but concurrently failed to deliver rewards to U.S. investors: the manufacture of radios and televisions, for example. But I will draw a lesson from these businesses: The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage. The products or services that have wide, sustainable moats around them are the ones that deliver rewards to investors.

Hidden in the latest earnings release from Canadian Solar Inc. (Nasdaq:CSIQ) was this interesting observation from Chief Executive Shawn Qu about Germany, a huge market for solar energy.

"I just returned this past Saturday from another visit to our key German market. Unlike earlier
visits, I observed some weakness in this important market, which I believe is
attributable, in part, to inventory clearance efforts by smaller solar module
makers, many of whom are, I believe leaving the market," he said.

Qu added that industry consolidation will benefit the company -- which despite its name is based in China -- in the mid- to long-term. the short term was going to be difficult since " the current inventory clearance efforts by these smaller solar module makers have caused some of CSI's German distributors to delay or
reduce their end-of-year product stocking plans, thereby impacting CSI's
near-term operating results."

Legendary investor Peter Lynch, whose fondness for solar power is well-known, told me he isn't worried about a slowdown in this key solar market.

"I would certainly expect some slowdown given the rapid growth of the past years, but if so, it is only temporary and some of it will be picked up from other parts of Europe and Asia," he wrote in an email. "We are only at the very, very beginnings of the solar growth phase...........it have many decades to run."

I was thrilled to learn this morning that Google Inc. (NASDAQ: GOOG) will meet part of its energy needs with solar power.

I've been interested in solar power since I measured how much a couple of solar cells would heat water while earning my engineering degree in college. And my house has two big solar panels on it that save us a few hundred dollars a winter.

I have long wondered, then, what it would take to get this technology out of the lab and into wider use. Despite technological advances since the first photovoltaic cells were invented 50 years ago, solar power is still two to three times more expensive than fossil fuels in the U.S. and relies on government subsidies to compete.

GE ended the day at $33.27, up 34 cents, almost a percent. Another day up. I also found it interesting that GE continues its investment with alternate energy through its Energy Financial Services area, helping to finanace the installation of large roof-covering solar panel arrays in five San Diego schools. The financing of these projects allows the buildings to purchase a solar array with the cost spread out over a 20 year period.

This is another way GE is trying to create a whole market for alternative energies. One would naturally expect to see the company angle to get its technology installed, but again, this is another area where GE is taking a longer view to the situation.

GE ended the day at $34.55, up 33 cents, a neat feat considering that the rest of the market took a dive for the second day running. Despite some awkward news for its NBC division about a potential strike, GE has a run of good news it's reporting.

The first piece is that GE is breaking ground on the world's largest solar panel power plant, another big victory for their Ecomagination campaign. For GE it is a major cross-company focus that pays off by letting them pull to the front and create large alternative energy projects with their backing. GE was in the news yesterday for a large wind turbine deal as well.

GE also showcased technology that will go into upcoming LCD screens, something we're not going to see less of around the world anytime soon, demonstrating that GE's materials division is going strong. Not a bad day for the conglomerate, everything else considered.