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.

Investopedia Markets: Explore the best one-stop source for financial news, quotes and insights.

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.)

Top Solar Picks


Company Market
Capitalization
China Sunergy
(Nasdaq:CSUN)
31.78M
LDK Solar
(NYSE:LDK)
636.66M
Yingli Green Energy
(NYSE:YGE)
669.16M

Rising Oil Prices Spur Investment
Oil prices are near $100, 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. After all, 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 considered a popular alternative for power generation and the technology is unlikely to go away anytime soon.

LDK Solar
One of the aforementioned companies what could be worth a closer look LDK Solar (NYSE:LDK). The company is based in China, but has an office in California. It designs and makes solar wafers. The wafers are used to make solar cells, which in turn, are used to convert the power from the sun into electricity. Going forward, particularly if the price of more traditional forms of electrical generation is high, then the demand for the LDK's products and solar power in general could increase.

Bottom Line
Alternative energy companies are likely to be in greater demand in the future. And as a result, solar stocks have the potential to do quite well over time.

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Investing

    How to Ballast a Portfolio with Bonds

    If January and early February performance is any guide, there’s a new normal in financial markets today: Heightened volatility.
  2. Stock Analysis

    Performance Review: Emerging Markets Equities in 2015

    Find out why emerging markets struggled in 2015 and why a half-decade long trend of poor returns is proving optimistic growth investors wrong.
  3. Investing News

    Today's Sell-off: Are We in a Margin Liquidation?

    If we're in market liquidation, is it good news or bad news? That party depends on your timeframe.
  4. Investing News

    Bank Stocks: Time to Buy or Avoid? (WFC, JPM, C)

    Bank stocks have been pounded. Is this the right time to buy or should they be avoided?
  5. Stock Analysis

    Why the Bullish Are Turning Bearish

    Banks are reducing their targets for the S&P 500 for 2016. Here's why.
  6. Stock Analysis

    How to Find Quality Stocks Amid the Wreckage

    Finding companies with good earnings and hitting on all cylinders in this environment, although possible, is not easy.
  7. Investing News

    What You Can Learn from Carl Icahn's Mistakes

    Carl Icahn has been a stellar performer in the investment world for decades, but following his lead these days could be dangerous.
  8. Stock Analysis

    Analyzing Altria's Return on Equity (ROE) (MO)

    Learn about Altria Group's return on equity (ROE) and analyze net profit margin, asset turnover and financial leverage to determine what is causing its high ROE.
  9. Investing News

    Icahn's Bet on Cheniere Energy: Should You Follow?

    Investing legend Carl Icahn continues to lose money on Cheniere Energy, but he's increasing his stake. Should you follow his lead?
  10. Stock Analysis

    Analyzing Google's Return on Equity (ROE) (GOOGL)

    Learn about Alphabet's return on equity. How has its ROE changed over time, how does it compare to its peers and what factors are driving ROE for the company?
RELATED FAQS
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center