As usual, the demise of the European solar market has been wildly blown out of proportion. Last week, First Solar (Nasdaq: FSLR) announced an additional 380 MW of orders from existing customers, mostly in Europe.
Investors have been concerned for years that feed-in tariff cuts and government budget difficulties would dampen demand for solar but it has yet to materialize. Analysts are saying First Solar is already sold out for 2011 nearly four months before the year starts, so it's easy to see demand picking up for other manufacturers.
First Solar is the industry's cost leader and my pick to stay on top if 2011 got tough for solar. Now that we know demand is picking up, it's time for investors to get bullish on Yingli (NYSE: YGE), Trina Solar (NYSE: TSL) and Solarfun (Nasdaq: SOLF) -- three module producers with low costs.
This may also give Evergreen Solar (Nasdaq: ESLR) some time to ramp up production in Asia, lower costs and become competitive again in the solar market. Given enough time to complete its strategies, Evergreen provides investors among the highest leverage in the industry. I'm not quite ready to buy shares yet, but I'm adding Evergreen to My CAPS page to see where it goes.
In other news, JA Solar (Nasdaq: JASO) also announced a big order last week adding 100 MW to an existing 85 MW solar cell agreement with BP's (NYSE: BP) solar subsidiary.
I've been cautiously optimistic solar demand would exceed expectations in 2011 and now it appears to be materializing. The U.S. market is also primed to pick up as regulators begin to approve projects. With some analysts projecting solar will reach grid parity in certain markets by 2013, the solar boom is really just beginning. It should be an exciting year for solar.
Interested in reading more about First Solar? Click here to add it to My Watchlist, and My Watchlist will find all of our Foolish analysis on this stock.
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