Image source: Getty Images.

TerraForm Global Inc. (NASDAQ: GLBL) and Trina Solar (NYSE: TSL) are very different solar companies, and investors looking for exposure to the industry shouldn't treat them the same at all. TerraForm Global is a company that owns and operates solar and wind power plants around the world, paying dividends to investors with the proceeds each quarter. Trina Solar is a solar manufacturer that relies on the market to buy the solar panels and power plants it builds each year.

Which one is better for your portfolio? Here are some key things to think about. 

Solar manufacturing is a tough business

Of these two companies, Trina Solar is far older and better known, and it is in the middle of a potential buyout by its management. That offer of $11.60 per share is an upside of about 10% for investors, and if the acquisition goes through, it could be a nice gain. But it's the reasons I think the buyout won't go through that should concern investors most. 

Trina Solar management's early August offer to buy the company was made when solar module prices were around 20% higher than they are today. At $0.40 per watt or less on the spot market, solar panels are likely a money-losing business for most manufacturers. Trina Solar also had $1.8 billion in debt, not including an incredible $1.2 billion in accounts payable. 

If panel prices stay below $0.40 per watt and volume drops, Trina Solar will be in rough shape, which will make a buyout far less likely. In that sense, the downside risk belongs to shareholders, with the upside potential going to management's buyout group. That's not a good position for Trina Solar's shareholders to be in. 

The safe choice isn't always so safe

In theory, TerraForm Global should be the safer of the two companies, hands down. It owns renewable energy projects with long-term contracts to sell energy to utilities, which should be a safe business. 

The problem is that TerraForm Global was created by SunEdison, which is now bankrupt. SunEdison's failure and the fact that TerraForm Global uses SunEdison's back-office functions, like accounting, has created a number of problems. It's led to delayed financial filings for nearly a year, so we don't know what the income statement or balance sheet look like today. And we don't know where debt and power purchase agreements will end because some counterparties can cancel agreements if SunEdison loses control of TerraForm Global. 

Yahoo! Finance says the stock yields 27% for investors, which would be a steal if it were a reliable dividend. But the dividend is currently suspended and won't likely be at the same level when it resumes. As a result, we have no good way to gauge the value in TerraForm Global's shares today. 

Are either of these stocks a buy today? 

Between these two companies, there's a lot of risk no matter how you look at it. But I think TerraForm Global provides more upside potential, despite the risks in owning a company with uncertain finances. We don't know what the dividend might be when the yieldco breaks free of SunEdison, but at least it has some cash flow investors can count on.

At the end of the day, Trina Solar is all risk with very little upside potential. And with solar panel prices dropping like a rock, I don't see a reason to own the stock. Both stocks, though, have a significant amount of risk going forward.