Can Solar Keep Soaring?

If China and recent stock prices are any clue, the outlook for solar energy and solar companies is as bright as the sun that powers the technology. However, the U.S. might not make an incredibly strong showing in the bright, sunny market.

The news around solar energy seems to just keep getting better as the days roll on — 2012 ended with a solar-stock rally that saw many solar companies’ stocks surge. Warren Buffett was among those putting money on solar as MidAmerican Energy Holdings, a holding company controlled by Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB), agreed to purchase the 579-megawatt Antelope Valley Solar Projects from SunPower Corp. (NASDAQ:SPWR) for between $2 and $2.5 billion.

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But by and large, forward-thinking China has a corner on this industry.

What’s China got to do with this?

Not only does China possess the world’s two largest solar manufacturers, LDK Solar Co (NYSE:LDK) and Suntech Power Holdings (NYSE:STP), which both saw their stocks jump with the rest in late 2012, but China could also be pushing to become the world’s biggest solar market in 2013, and it likely will, according to HSBC Holdings. The Chinese government will be offering about $290 million in solar installation subsidies, which could further boost the likes of LDK and Suntech.

What does this mean for the U.S.?

The U.S. is by no means missing out on the solar jump, as SunPower Corp. and First Solar (NASDAQ:FSLR) are both large, American companies that have benefited from the solar jump. However, China now only has the two biggest players in the field, but the biggest market, too, which means its companies will likely see strong business at home. Fortunately for American investors, LDK and Suntech are both publicly traded on the New York Stock Exchange, so everyone can get a slice of the pie if solar continues to climb.

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