Solar power is one of the most promising industries of the next few decades -- potentially transitioning the world toward sustainable, clean, and renewable energy. Environmentally friendly and cheap electricity promises to create jobs, fuel economic prosperity, and make long-term investors rich.
U.S. Solar Energy Production data by YCharts.
U.S. solar power production has grown at 20% annually over the past decade, and the potential worldwide is even better. For example, IHS estimates that global solar installations through 2020 will total 537 GW, an estimate that is up 13% since last year and represents $1 trillion in investment in just the next six years.
Companies like SolarCity (SCTY +0.00%) and SunEdison (SUNE +0.00%) offer distributed solar systems that could make them into the solar utilities of tomorrow. They promise to let investors cash in on what may be one of the largest long-term energy bonanzas in history and have become Wall Street darlings.
Although the potential for SolarCity is indeed massive, investors should be aware of six major risk factors that threatens not only SolarCity's short-term share price but its entire long-term business model. SunEdison is also affected by several of these; however, thanks to the IPO of its yieldco Terraform Power Inc (TERP +0.00%), I believe SunEdison makes a more promising long-term investment -- at least at the moment. Check out the slideshow below to see why.
