So far in 2011, the Claymore/MAC Global Solar Index ETF (TAN) has shot up by an impressive 18%, while the broad market has climbed up by almost 6%. What happened to the bearish sentiment, the falling subsidies, the rush away from clean energy stocks? That attitude seems to be gone, at least for the moment, and in its place is cautious optimism.

An upgrade doesn't hurt
Although the entire sector could arguably look attractive, there's one company in particular that I've always favored, and that's First Solar (Nasdaq: FSLR). In late January, Goldman Sachs came out with a research report upgrading First Solar's shares and putting it on their conviction buy list. Goldman commented that, as the lowest-cost supplier in the industry, First Solar has the best risk/reward scenario in the space.

In addition, UBS Investment Research came out with information saying that California's renewable energy portfolio standard could rise from 20% to 33% in the near future, a move that would certainly help U.S.-based solar providers. Companies such as First Solar and SunPower (Nasdaq: SPWRA) that have large, developed project pipelines in the West seem to benefit the most from the potential passing of California legislation.

Recent activity is increasing
In an industry like this, which was (and is) still pretty dependent on foreign subsidies, any activity is seen as a huge plus. SunTech Power (NYSE: STP) just announced a 150-megawatt project from Sempra Energy in Arizona, and China's LDK Solar (NYSE: LDK) recently announced a 30% stake purchase in a U.S. solar project developer. But don't count First Solar out. First Solar recently bought the 15 MW Amherstburg II Solar Plant from Helios Energy and then agreed to sell it to Enbridge with an operating and maintenance agreement included. Furthermore, First Solar agreed to expand its supply agreement with cadmium telluride supplier 5N Plus by 30% initially and then by 60% by 2013, so it doesn't look like First Solar is slowing down anytime too soon.

This year First Solar has shot up by 27%, which might scare some investors away. But considering the fact that peers ReneSola (NYSE: SOL) have gone up by 34% and LDK Solar by 31%, I don't think it's too much to fathom that First Solar keep rising in 2011.

It might just be that investors got a little too caught up in the subsidy cuts in Germany and will be pleasantly surprised by markets in Italy and the U.S.

Feel free to add any of these companies to My Watchlist to get the latest news and commentary.

Jordan DiPietro owns shares of First Solar. First Solar is a Motley Fool Rule Breakers pick. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy that uses thin film solar cells to get a wicked tan.