Solar Stocks Have Performed Terrifically Well

Friend-of-a-friend Harris Roen follows the clean energy sector of the stock market and notes that the solar industry has gone through the roof lately; 2013 has brought an average return of over 50%.  Exactly why?  I’ll let you check out what he says.

Personally, I think it’s because of the consolidation, and the hard times through which the industry had gone over the previous years.  It’s a sector that’s been through the worst, and come out the other side – a sort of “what doesn’t kill me makes me stronger” phenomenon.

My colleague Shawn Kravetz, in the webinar on solar investing that I did with him last March, noted several reasons, of which my concept above is part of a few:

• Firming of pricing (prices aren’t still plummeting)

• Emergence of new areas of demand (e.g., new regions of the world)

• Rationalization of supply (i.e., far less over-supply)

• New investment opportunities (new funds/vehicles for investors to come on board)

• De-escalation of the tariff threats (the threats to the health of the industry are still there; they’re just smaller)

• Capitulation of the investment community (investors are no longer aggressively driving the price down)