NEW YORK ( TheStreet) -- Something quite extraordinary has been happening over the last three months: Solar stocks are back.
Most survivors of the shakeout from the last few years have gained in the range of 40%-60%, with the TAN (TAN)ETF up 58% and the KWT (KWT)ETF 66% higher. The U.S. industry's "bell cow," First Solar (FSLR), trails the field with a gain of 47%.
The leader by far is SunPower (SPWR), which has soared 230% over the last three months. After falling as low as $3.71 last summer, the company, which is majority owned by France's Total (TOT), now trades at $13 per share.
The reason for SunPower's relative success, according to Insider Monkey , is efficiency. Its panels are up to 21% efficient at turning solar energy into electricity. That's almost double the average for FSLR. Its balance sheet is also fairly good for a company of this type, with about half as much cash as debt. The cash balance has been rising steadily since Total moved in.Like its Chinese rivals, SunPower uses polysilicon in its panels. It generates most of its revenue from U.S. projects on a utility scale, although its Web site is filled with happy homeowners. It adds microinverters to its panels, lowering installation costs, and says it has cut costs per-watt by 25%. SunPower has enjoyed huge benefits from its link with Total, which has let it keep improving in efficiency despite continuing losses. The rest of the industry is coming back on a wave of new demand. New markets are opening, like Argentina, according to Bloomberg, and the Middle East, according to Nanowerk. As costs drop, more U.S. businesses find they can afford panels, which create power where it's used. Some, like a nursery in Ft. Worth, claim they can pay for the investment over three years from electricity savings, writes the Ft. Worth Star-Telegram. The financing market has also improved, as companies like SolarCity (SCTY), which had its IPO in the fourth quarter of 2012, scale into the commercial market. Honda dealerships in California say that their SolarCity-financed panels deliver power for less than the cost of the state's grid, according to Marketwatch. The cost of solar power fell below that of power from the electrical grid in Hawaii some time ago. Now this "grid parity," sometimes called "crossover," has reached the mainland and begun spreading across the country. There are several ways in which you can reduce costs - panel efficiency, manufacturing costs, financing costs, installation costs, and permitting costs. It's not just about the cost-per-watt delivered from the factory, but the total installed cost-per-watt.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV