I have long been optimistic about Solar Energy (whether photovoltaic or thermal) becoming our largest energy source within a few decades.  Earlier articles on the subject include :

A Future Timeline for Energy

Solar Energy Cost Curve

Several recent events and developments have led me to reinforce this view.  First of all, consider this article from Scientific American, detailing a Solar timeline to 2050. The article is not even Singularity-aware, yet details many steps that will enable Solar energy to expand by orders of magnitude above the level that it is today.  Secondly, two of the most uniquely brilliant people alive today, Ray Kurzweil and Elon Musk (who I recently chatted with), have both provided compelling cases on why Solar will be our largest energy source by 2030.  Both Kurzweil and Musk reside in significantly different spheres, yet have arrived at the same prediction.

However, the third point is the one that I find to be the most compelling. There are a number of publicly traded companies selling solar energy products, many of which had IPOs in just the last three years.  Some of these companies, and their market capitalizations, are :

Now consider that the companies on this list alone amount to about $50 Billion in capitalization.  There are, additionally, many smaller companies not included on this list, many companies like Applied Materials (AMAT) and Cypress Semiconductor (CY) for which solar products comprise only a portion of their business, and large private companies like NanoSolar (which I have heavily profiled here) and SolFocus that may have valuations in the billions.  Thus, the market cap of the 'solar sector' is already between $60B and $100B, depending on what you include within the total.  This immense valuation has accumulated at a pace that has taken many casual observers by surprise.  A 2-year chart of some of the stocks listed above tells the story. 

While FirstSolar (FSLR) has been the brightest star, all the others have trounced the S&P500 to a degree that would put even Google or Apple to shame over this period.  Clearly, a dramatic ramp in Solar energy is about to make mainstream headlines very soon, even if the present valuations are too high. 

Is this a dot-com-like bubble?  Yes, in the near-term, it is.  However, after a sharp correction, the long term growth will resume for the companies that emerge as leaders.  I won't recommend a specific stock among this cluster just yet, as there are a wave of private companies with new technologies that could render any of these incumbents obsolete.  Specific company profiles will follow soon, but in the meantime, for more detail on the long-term trends in favor of Solar, refer to these additional articles of mine :

Why I Want Oil to Hit $120 per Barrel

Terrorism, Oil, Globalization, and the Impact of Computing

(crossposted on TechSector)