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
China Sunergy
LDK Solar
Yingli Green Energy

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. Stock Analysis

    3 Resilient Oil Stocks for a Down Market

    Stuck on oil? Take a look at these six stocks—three that present risk vs. three that offer some resiliency.
  2. Economics

    Keep an Eye on These Emerging Economies

    Emerging markets have been hammered lately, but these three countries (and their large and young populations) are worth monitoring.
  3. Stock Analysis

    Is Pepsi (PEP) Still a Safe Bet?

    PepsiCo has long been known as one of the most resilient stocks throughout the broader market. Is this still the case today?
  4. Investing

    The ABCs of Bond ETF Distributions

    How do bond exchange traded fund (ETF) distributions work? It’s a question I get a lot. First, let’s explain what we mean by distributions.
  5. Stock Analysis

    3 Stocks that Are Top Bets for Retirement

    These three stocks are resilient, fundamentally sound and also pay generous dividends.
  6. Investing News

    Are Stocks Cheap Now? Nope. And Here's Why

    Are stocks cheap right now? Be wary of those who are telling you what you want to hear. Here's why.
  7. Investing News

    4 Value Stocks Worth Your Immediate Attention

    Here are four stocks that offer good value and will likely outperform the majority of stocks throughout the broader market over the next several years.
  8. Investing News

    These 3 High-Quality Stocks Are Dividend Royalty

    Here are three resilient, dividend-paying companies that may mitigate some worry in an uncertain investing environment.
  9. Stock Analysis

    An Auto Stock Alternative to Ford and GM

    If you're not sure where Ford and General Motors are going, you might want to look at this auto investment option instead.
  10. Mutual Funds & ETFs

    The 4 Best Buy-and-Hold ETFs

    Explore detailed analyses of the top buy-and-hold exchange traded funds, and learn about their characteristics, statistics and suitability.
  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 >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!