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Tickers in this Article: CSIQ, ENER, LDK, SOLF, TSL
Solar power is not a new concept. For centuries homebuilders purposely constructed and positioned houses to take in sunlight and to warm the occupants. Fast forward to the 21st century and now whole homes are being outfitted with panels, cells and other gadgets that convert the sun's rays into electricity.

The good news is that investors have the ability to get in on this technology as well. The following is a list of companies that provide various types of solar power goods or services: (To learn how the industry works and how to spot the winners before you buy in to the hype, read Spotlight On The Solar Industry.)

Five Select Solar Stocks

Company Market Cap
Canadian Solar
(Nasdaq:CSIQ)
$763M
Energy Conversion Devices
(Nasdaq:ENER)
$3.0B
LDK Solar
(NYSE:LDK)
$4.5B
SolarFun Power
(Nasdaq:SOLF)
$840M
Trina Solar
(NYSE:TSL)
$752M

Rising Oil Prices Spur Investment
Oil prices have been hitting record levels consistently in 2008, and there is very little sign this pace slowing anytime soon. As the price of oil rises, the interest in greener companies rises as well. Solar power is one of the top green energy contenders. (Learn more in our related article Clean Or Green Technology Investing.)

If oil trends higher there could be a greater demand for shares of various alternative energy companies including those in the solar space.

The Risks
With all of the above in mind, it is important to realize that there are risks to investing in solar power. First of all, it's unlikely that individuals are going to make a shift to this technology en masse in the very near future. Switching to solar energy can run up a bill for homeowners in the thousands of dollars range, and in this tight economy people aren't packing a lot of disposable cash. In addition, although there are some environmental concerns, nuclear power is growing in popularity as an alternative for power generation and the technology is unlikely to go away anytime soon.

Sunny Days Ahead for Energy Conversion Devices?
Energy Conversion builds and sells thin-film solar laminates that convert sunlight to energy using proprietary technology. One nice thing is that the company is based in Michigan instead of China, where many of its rivals are based these days. I have nothing against China, and there are certainly plenty of solid plays to be had there, but I think that there is also a certain positive in knowing that if I wanted to, I could be at the company's doorstep within a few hours to see its offices firsthand. Call me paranoid!

Beyond the location factor, Energy Conversion Devices is coming off a decent third quarter. It reported a profit of almost $7 million, or 17 cents per share, yet the Street had been looking for a 6-cent per share loss according to Forbes. Its revenue number came in ahead of expectations as well.

Earnings Estimates Too Steep?
Wall Street is currently expecting Energy Conversion Devices EPS of one penny per share profit this year (full year numbers are due out on August 28) and $1.48 per share next year.

Now, I'm not certain those numbers are achievable at this point. I'd prefer to wait until after the Q4 numbers are released to get a better sense before even thinking about jumping on board. That said, if it does manage to post a nice profit next year, the stock could pop.

The downside is that Energy Conversion Devices is not cheap. At present it trades at about 46.8-times the $1.48 per share estimate, which is a high forward P/E. If the price of oil keeps dropping then the attention that consumers and investors are giving to alternative energy type companies in general could begin to wane.

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