The company is called China Sunergy (NASDAQ: CSUN). And this week, the solar cell and module manufacturer announced its seventh straight quarterly loss.
Now take a look at this chart:
Ouch!
Many others have run a similar course since 2011. And I don’t expect to see any miracles this year, either — at least, not from the majority of these manufacturers, which are based out of China.
This, my friends, is why I have steered clear of most solar stocks over the past two years…
Of course, I have dipped my toes back into the waters of the U.S. solar sector, as these stocks have been able to provide a bit of a comeback recently. Check out these two U.S. manufacturers, First Solar (NASDAQ: FSLR) and SunPower Corp. (NASDAQ: SPWR):
And U.S. solar installation and leasing company, SolarCity (NASDAQ: SCTY), has also done quite well since going public last December. Take a look:
All three of these companies are based in the United States, and all three have delivered quite well for us this year.
But when it comes to U.S.-based solar companies, the gains we’ve pulled off from these are peanuts compared to our latest American solar play…
Sunny Money
The truth is there’s a boatload of cash to be made in the solar space.
Sure, there are still those who don’t want to believe that the solar market continues to grow by leaps and bounds. And there are others who insist solar stocks are a sucker’s bet.
But if that’s the case, then I must know a lot of very wealthy individuals who are also suckers — and who are now sitting on gains from three separate solar stocks, all in excess of 50%.
Of course, that’s not to say these plays are going to run forever. Nothing does. That’s why we’re now moving on to our next big solar payday.
But before I get into the meat and potatoes of this one, let me explain one thing…
Right now, the solar investments that boast the most profit potential with the least amount of risk can be found in two categories:
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Installation
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Technology
Installation Nation
On the installation side, we’ve been watching enthusiastically over the past few years, and last year in particular absolutely crushed it.
In 2012 we saw a 76% increase in solar installations. By the end of the year, there was enough solar power online to generate electricity for 1.2 million U.S. homes. And the best part: The market for U.S. solar installations has grown from $3.6 billion in 2009 to $11.5 billion in 2012.
My friends, 2013 is actually expected to come in higher.
There’s no doubt about it: In the United States, solar installations are booming.
Unfortunately, the only way to play this directly is through SCTY. So your options here are certainly limited.
On the technology side however, you have more options; but the tough part is weeding through all the non-starters to get to the good stuff.
Key to Profits
On any given day, you can find some news story about a new breakthrough solar technology. And I would say about 85% of these are truly groundbreaking discoveries, but they will still flounder in the lab for at least another decade.
The key to profiting from solar technology plays is to find the tech leaders that are actively building commercial-scale operations to facilitate the integration of their respective technologies.
Anything else, and you just have to wait too long and take on too much risk before seeing a worthwhile return.
Plus receive our new free report, Solar Investing 101
To a new way of life and a new generation of wealth…
Jeff Siegel
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Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.
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