Solar energy stocks have had a great week, though analysts warn that its still a volatile industry, and the European Union’s proposed trade sanctions on Chinese solar panel manufacturers could have adverse effects.
Some of the big name solar companies, from manufacturers to installers, have seen massive surges in their stock process this week, adding to significant gains since the start of the year.
Stocks like SunPower (SPWR) limped through 2012 at stock price lows hovering around $5 a share, only to come bounding back to life in 2013. The stock has surged 240 percent since January to $19.49 a share on May 24.
New darling of the industry, SolarCity (SCTY) is up 148 percent in the past three months to $49.25.
Both companies are dramatically different from each other. SunPower is a U.S.-based solar panel manufacturer, which means the company has struggled with extraordinarily low profit margins as solar module prices plummeted over the last two years.
The company, however, has created its own downstream markets, building solar plants throughout the U.S. and in emerging markets like Asia and selling completed or nearly-completed projects.
SunPower and other solar companies saw their stocks soar after a Warren Buffet subsidiary bought two SunPower farms earlier this year.
SolarCity uses the solar leasing model, installing panels on residential rooftops, retaining ownership of them and selling the power they produce to the occupants at a fixed price. Elon Musk, who owns SpaceX and Tesla is deeply affiliated with the company, adding to its high-profile status.
JA Solar Holdings (JASO) also climbed 42 percent since the beginning of the year to $8.32 per share after announcing this week a 6 percent increase in first-quarter revenue. The new bumped JASO along with other solar panel manufacturers.
However, an impending June 6 implementation date for a European Union punitive trade tariff on Chinese solar panel manufacturers could damage gains for Chinese manufacturers and ultimately send other solar stocks slipping in tandem, warn some analysts.