Shares of solar-energy companies jumped on Chinese subsidies, optimism the Obama administration will succeed in pushing through policies that help the industry and signs the economy may be close to bottoming out.

Suntech Power ( STP) increased 38% today, LDK Solar ( LDK) rose 29% and Yingli Green Energy ( YGE) advanced 22%. Techtronic Industries ( TTNDY), SunPower ( SPWRA), Energy Conversion Devices ( ENER) and GT Solar International ( SOLR) also gained at least 10%. Ratings' model rates SunPower, Energy Conversion Devices and Suntech Power in the "hold" range, while issuing "sell" grades for LDK Solar and Yingli Green Energy.

China this week began offering subsidies toward the purchase of rooftop solar systems. Back home, $2.6 billion in federal stimulus money has begun flowing through the Energy Efficiency and Conservation Block Grant program of the U.S. Energy Department.

Energy is a major theme in the budget that President Barack Obama submitted to Congress. The sector is more likely to find success once the economy rebounds. Indeed, there have been better-than-expected reports. Durable-goods orders for February rose 3.4% after falling 7.3% in January, confounding economists, who were forecasting a decline. New-home sales also increased in February, by 4.7%.

To place a bet across the board on a turnaround in solar stocks, there's Market Vectors Solar Energy ETF ( KWT). It holds all of the companies mentioned above, except Techtronic Industries. Claymore/MAC Global Solar Energy Index ETF ( TAN) omits GT Solar. Neither fund, both of which began trading a year ago, have compiled a long enough track record to be rated.

The downside of a potential return to economic growth is the ratcheting up of crude-oil prices. The spot price of West Texas Intermediate Cushing crude opened at $54.29 today, the highest since Nov. 28. High energy prices make solar energy a more viable option.

For more information, check out an explanation of our ratings.
Kevin Baker became the senior financial analyst for TSC Ratings upon the August 2006 acquisition of Weiss Ratings by, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.