SunPower Corporation (SPWR), SolarCity Corp (SCTY) & First Solar, Inc. (FSLR): How Fast Will the Solar Market Shift?

This is really about who owns the capital, he said. “In most places where solar is viable, if you have 100 million in assets you can earn $10 million in profit. Each time someone puts up a rooftop solar system it reduces the need” for investment, reducing their ability to grow. That, plus the lower per-panel costs of installing and permitting a scaled solar installation, are why companies like First Solar, Inc. (NASDAQ:FSLR), which specialize in building and selling such installations to the utilities, are doing so well.

What comes next?

While grid costs are increasing, solar costs are decreasing, so more-and-more places will reach “grid parity” over time. By the end of the decade, the whole U.S. will find it can make its own power for less than it would cost to buy that power from a utility.

Another promising avenue is the use of Corning Incorporated (NYSE:GLW) WillowGlass as a backplane for CdT panels, the market First Solar, Inc. (NASDAQ:FSLR) dominates. Polysilicon advocates have been selling the “flammability” of CdT for years, saying it’s too risky for rooftop installation. Glass may make it possible for CdT to be used in shingles, becoming self-installing. This could cut the costs of rooftop solar in half, at a stroke.

But there are other changes taking place as well. On-grid storage is becoming important, not only so utilities can deal with intermittent power sources but so they can “clean” the power they deliver for computers, which are using more-and-more of the power utilities generate. SolarCity Corp (NASDAQ:SCTY) is already offering storage with its installations, and that opportunity will increase as new storage technologies, like graphene, come online.

When you buy a solar stock, in other words, you’re basically buying hope. The industry’s reality today is much more hopeful than it was, and less hopeful than it will be. But it’s still built on hope. If you prefer buying results to hope, your best bet is First Solar, Inc. (NASDAQ:FSLR). If you prefer hope, buy SunPower Corporation (NASDAQ:SPWR). If you think the channel will dominate, then SolarCity Corp (NASDAQ:SCTY) is the stock for you.

The article How Fast Will the Solar Market Shift? originally appeared on Fool.com.

Dana Blankenhorn has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Dana is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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