Is the group's recent run-up a solar flare or a sign of bigger things to come?

Solar energy stocks are hot once again, with shares of industry players jumping as much as 58% in the past month. Much of that bounce is due to nearly uniformly positive quarterly earnings reports from some solar outfits. Company executives were able to allay investors' fears about declining demand and lower prices for solar panels and related materials, concerns that were fueled by a sharp reduction of government subsidies in countries such as Spain.

"You've had a lessening of fear in the market of what would happen with Spanish traffic and the U.S. tax credit," says Pavel Molchanov, an analyst who covers solar companies for Raymond James & Co. (RJF). "The visibility hasn't improved, but investors are taking it more in stride and are feeling more confident that, even in the worst case, there will be ample demand in other more early-stage solar markets."

For further information: BusinessWeek