Solar IPOs shine

Recent offerings, most out of China, have surged along with the sector in general. Is a correction coming?

NEW YORK (CNNMoney.com) — Talk about a sun spot.

The solar power sector has been rolling in dough lately as concern over global warming and dwindling oil supplies has fueled massive investor interest in renewable energy companies.

Since the start of the year, the 17-company solar component in the Wilder Hill Global Innovation index has soared 75 percent.

This recent surge in stock prices seems to indicate that now is the perfect time to take a company public.
Money pouring into solar initial public offerings has set a record in 2007 – $4.7 billion so far, according to the research firm New Energy Finance. That compares to $2.2 billion in 2006 and $1.5 billion in 2005.

But with interest so high and recent performance so stellar, is now really the time to get hot for solar companies?

“There’s a lot of media hype in current solar stock prices,” said Jenny Chase, a London-based solar analyst at New Energy Finance. “We certainly can expect a correction at some point.”

The media hype isn’t totally unjustified.

Oil and natural gas prices have skyrocketed in recent years. Scientists are more certain than ever global warming is real, is largely caused by burning fossil fuels, and could have devastating effects. A switch to renewable energy like solar could ease the effects of both these things.

CNN Money