Free SRI Mutual Funds Guide"Solar energy equipment can be deployed to create power in several ways, thus one can diversify investment within the sector," said Monique Hanis, director of communications at SEIA.
Solar is experiencing growing support from the local, state, and federal governments. New Jersey, Florida, Maryland, New York, Nevada, North Carolina, Washington, and New Mexico have all increased their solar energy incentive programs. Other states have passed laws dictating that more energy be from renewable sources. California has mandated that utilities generate 20 percent of their energy from renewables by 2010 with that figure rising to 33 percent by 2017.
On a federal level, the US congress is working to address climate change and carbon emissions, which will also play into supporting solar. However, the U.S. is only fourth in the world for solar installations. Germany, Japan and Spain lead in solar installations. Germany, although not in a particularly sunny location, leads the world in solar usage due in large part to Germany's solar subsidies.
"[The] U.S. will eventually legislate a solution for carbon emissions," said Hanis. "Hopefully it will fairly penalize polluting sources with high emissions and give credit to clean, renewable sources."
One of the most important questions for investors is if solar can reach grid parity. In other words, when solar will be able to compete with traditional, carbon based energy sources, watt for watt, in terms of production and cost.
Another question raised by investors is what will happen if oil prices fall? Will the interest in solar energy diminish? Hanis doesn't share this fear. In answer to this question, she said," I'm more worried that the U.S. will lose its technology and business leadership and miss out on a huge job and investment opportunity to build the clean-tech sector here."
For investment purposes, solar energy companies can be divided into photovoltaics (PV) and Concentrating Solar Power (CSP). Both of these technologies are used to produce electricity.