A great way to lose money had been to invest in solar stocks. At least that was the case from 2009 to 2012. But leading solar stocks are roaring back in 2013.
The winners include solar panel manufacturers, where brutal competition had destroyed profit margins. First Solar, America's leading solar manufacturer, is up 270%. Sun Power, another US solar manufacturer, is up 240%. Not so surprisingly, Solar City, a solar installer, has soared too.
Two trends in the solar market are behind the strongly rebounding solar stocks. Consolidation in solar manufacturing has begun. One company's bankruptcy is another company's opportunity. Yet, global manufacturing capacity still exceeds global demand, and competition remains intense.
Though consolidation is helping stock prices, the main factor pushing up solar stocks is booming global solar demand. Deutsche Bank has just boosted yet again its 2013 projection for global solar installations to an astonishing 40,000 megawatts. Japan will be the leading market this year at 7,000 to 8,000 megawatts. Strong growth will be seen in China and America as well.
When the world is literally going solar, the opportunity to make money in the solar business has never been brighter.