Superstar Investors Name the Top Solar Stock

What a reversal. Down about 55% from $147 a barrel in July -- a premium that helped to create yet another quarter of huge profits for ExxonMobil (NYSE:XOM) and ConocoPhillips (NYSE:COP) -- oil prices have suddenly become reasonable again. And that's not exactly good news for green investors.

Nor is the latest data from the Commerce Department. The nation's gross domestic product fell 0.3% during the third quarter, the clearest sign yet that we're headed into recession. Can we really expect strapped consumers and pinched businesses to invest in alternatives such as solar at a time like this?

The Feds are. The bailout bill included a solar tax credit that's now law. Good. As much black gold as remains to be extracted, the oil market's mood swings over the past year have been at best annoying (i.e., higher food and gas prices) and at worst calamitous (i.e., sharply reduced consumer spending leading to an economic slowdown). Don't we need alternatives to help stabilize our far-too-fragile economy?

It's a question that's at least worth asking. And if it's worth asking, it's also worth having a look at the top solar stocks in our 120,000-strong Motley Fool CAPS database. Here are their five favorite solar stocks right now:

Source: CAPS, Yahoo! Finance. ^ Return from Jan. 29 IPO.

"X" marks the sunspot
Are solar investors bargain hunters? It sure looks like it from our table. AXT, the second-largest decliner, gets the top rating. But that could be a function of its price. Stocks become unratable in CAPS once they fall below $100 million in market cap or $1.00 per share. AXT commands roughly $40 million in market value as of this writing. The last CAPS rating for AXT, an "outperform" call, was made on Sept. 8.

So we don't really know if investors still like AXT at today's prices. We can be far more certain about Suntech Power (NYSE:STP), a Motley Fool Rule Breakers recommendation that has a huge following in CAPS, where it earns four stars:

Note: Data current as of Oct. 31, 2008.

Most of our rebel investors love China's Suntech because it's a low-cost manufacturer and supplier of solar cells that's positioning itself to triple its U.S. sales next year. But not everyone is convinced.

"Unless something radically changes with silicon efficiency technology, this is priced to high and the industry cannot deliver the expected results," wrote CAPS All-Star firenze1 two weeks ago.

Investor tylerfu agrees. "Good luck with Chinese solar power, in the short term as oil and economy both fall the need for renewable energy in China will fall as well."

And yet the solar bulls continue to run -- bulls like CAPS investor rosborneutah. "STP is solidly entrenched in the world's largest industrial and consumer market (uhhh, China), and has committed to furthering growth in the U.S. While the current drop in oil prices may detract from the urgency of alternative energy solutions, the solar/wind/geothermal industry has caught momentum and will build over the next few years."

Agreed, but I'm interested to know what you think. Would you buy Suntech Power at today's prices? What about First Solar (NASDAQ:FSLR), which is expanding margins and producing free cash flow even in the face of massive capital outlays? Let us know by signing up for CAPS today. It's 100% free to participate. And check out Fool Jim Gillies' take on First Solar; it's got him shaking in his boots.

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