Rolling the Dice With Solar: TAN, JKS, FSLR, and Snake Eyes

FRANKFURT - Solar has not given most investors in the sector a sunny disposition so far this year. The Guggenheim Solar ETF TAN is down over 8% year-to-date and an investor who has stuck it out with ReneSola SOL has seen that investment drop by over 45% since the beginning of the year. This contrasts sharply to the S&P 500, which is up almost 6% so far in 2011. One winning roll in the crap shoot of investing in the solar sector has been JinkoSolar JKS. Shares of the Chinese solar product manufacturer are up approximately 16% year-to-date. "A lot of investors in solar must feel like it's a crap shoot, and in many respects it is if you haven't done your homework," says Frankfurt-based analyst The Renewable Man. "So much of it is about when you put your money into one of the solar companies. Even Jinko has come up snake eyes for many investors, when you consider it traded at over $31 early in the year and is now around $23 a share," says The Renewable Man. The big players have not been immune to the downtrend in the solar sector in 2011. Tempe, Arizona-based First Solar FSLR, the top holding of the ETF TAN and the leader in thin-film solar, has also underperformed the overall market this year, with its shares down approximately 7.5% year-to-date. Though there has been some positive news for the solar sector recently, especially the jump in new investment in clean energy in the second quarter (financial new investment rose 27% from the first quarter), potential investors might want to wait until the trend for the sector starts heading up before rolling the dice. "One of the main problems for solar is the lack of data. No one really knows how much solar is out there. Just take the Italian market in 2010 as an example, and the surprise of so many about the installed capacity. There's too much noise in the sector, especially when you include government incentives and subsidies and will they be there or not. For most investors I'd council waiting for the trend to move up for more than a day or two before even thinking about investing," says The Renewable Man.