This article is part of our Rising Star Portfolio series.
Shadows have fallen over the solar industry in recent weeks. Will this sector leave socially responsible and green investors burned, or do brighter days still lie ahead?
Ugly times, unfair advantages
Last spring, Bill Gates brushed off solar technology as "cute," but lacking the power to deal with climate change or the developing world's energy requirements. Unfortunately, we can't dismiss many of the industry's recent setbacks so lightly.
Solyndra's high-profile bankruptcy scandal has tarnished the concept of government-backed green investment. Supporting a green tech company with a shaky foundation hardly seems like a sound "investment," for taxpayers or anybody else.
The Obama administration's hasty push to provide Solyndra's government loan guarantees, when even its own analysts raised the alarm about the loans, only provides additional ammunition to those who dislike government-funded green investments.
Unfortunately for the struggling U.S. solar industry, China has no such qualms about subsidizing its own alternative-energy efforts. The country's three biggest solar concerns, Suntech Power
Cute ... or cutting a path into a cleaner future?
Don't assume that solar's future looks permanently dim. China's cheap solar products could face a backlash, as global consumers rebel against Chinese manufacturers' decidedly lax approach to environmental responsibility. Just yesterday, JinkoSolar Holding
Furthermore, even though the downward trajectory of pricing currently makes survival difficult for U.S. solar companies, those lower prices will help solar gain greater ground as a viable energy source overall, and lower the bar for installation. Higher levels of solar cell efficiency are also changing the landscape in favor of solar, too.
Bill Gates may scoff, but last spring, inventor and futurist Ray Kurzweil offered a very different solar outlook. Though solar currently delivers less than 1% of global energy needs, Kurzweil believes it will actually be able to power the entire world in 16 years.
His prediction hinges on declining cost per watt and progress in nanotechnology, which he believes will lead to exponential growth very similar to Moore's Law. This rule, which has successfully predicted the dramatic increase in computers' processing power over the past few decades, is so entrenched in our collective consciousness that it can be hard to recall how mind blowing it was to see it proven out. Despite investors' current pessimism about the solar sector, the same sort of world-altering changes that put massive computing power in our collective pockets could also lead to a surge in solar successes.
The scary side of industry evolution
I recently bought shares of First Solar
Meanwhile, if Kurzweil's solar prognostications are correct, energy's future could be all about power harnessed from the sun. The present looks precarious, but the future rewards of picking the winners in the solar industry should be hefty.