Cupps praised the efficiency of SunPower’s solar panels and said SolarCity's recent purchase of panel maker Silevo should help drive down costs.
Shares of SunEdison tripled over the 12 months ended on Sept 3. The Market Vectors Solar Energy ETF is up 84 percent over that period, although the sector has been volatile and still remains below pre-financial crisis highs.
Pricey Shares
Skeptics cite setbacks like the 2011 bankruptcy of U.S. government-backed panel maker Solyndra LLC, plus soaring North American oil and gas production that could diminish interest in renewables.
The stocks also may be expensive. SunPower, for example, trades at 25 times expected earnings, about twice the multiples of some oil companies.
As solar stock prices rose over the last year, U.S. mutual funds sold some of their shares of SunPower, SunEdison and First Solar, according to Thomson Reuters' Lipper unit. But the value of their stakes still increased, likely because some managers held steady the percentage of solar in their portfolios, said Lipper Americas Research head Jeff Tjornehoj.
Lower solar costs reflect new technologies as well as cheap panels from Chinese manufacturers that have led to expanded U.S. import tariffs.
Kevin Landis, manager of the Firsthand Alternative Energy Fund, expects the tariffs to offer only marginal benefits to the companies he owns, SunEdison, First Solar and SolarCity.
A bigger help, he said, is that public utility commissions often allow electric rates to creep up to cover the costs of fossil fuels. That should bolster the competitive position of solar electric plants that do not have to buy costly fuel once they are built.
For most solar stocks, Landis said, "it's still right place, right time."