Early this year most solar stocks traded at multi-year lows. There were concerns that the demand for solar energy installations was being hurt by the recession and that component costs for solar installations where rising too fast.

The solar industry has reached a point of renaissance and several of the largest firms in the industry have sharply improved their forecasts for next year.

Shares in JA Solar (NASDAQ:JASO) moved from $4.50 to $5.80 in less than two trading days.The firm said customer orders and product deliveries were stronger than expected. Yesterday, First Solar (NASDAQ:FSLR) said its earnings per share could be as high as $6.85 in its fiscal year and that revenue might rise to $2.9 billion. Both are well above Wall St.’s forecasts.

Barron’s reported that “Amtech Systems (NASDAQ:ASYS) shares soared Wednesday after Hapoalim Securities analyst Gordon Johnson launched coverage of the company, which sells equipment used to produce silicon wafers for the solar and chip sectors, with a Buy rating and a $10 target.”  Johnson writes that the company’s position as an “arms dealer” to many of the leading Asian solar cell and module producers during a period of accelerated capacity additions “implies accretive earnings leverage on the horizon.”

Solar stocks prices are moving into record territory just a few months after an unprecedented collapse. Global warming is certainly a reason working in their favor. Oil prices may be relatively low now, but a number of investment banks do not expect that to last through next year. The notion that “peak oil” production for the world will occur in th next decade is getting more support.

And, the cost of the basic products for building solar energy capture facilities is coming down.

Solar is hot again. Ouch.

Douglas A. McIntyre

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