Check on China: Canadian Solar Inc.

Don’t be fooled by the name: even though Canadian Solar Inc. (Nasdaq:CSIQ) technically incorporated in Canada, all of its manufacturing operations (along with its corporate headquarters) are in China — a profitable niche to be in, especially speaking in energy terms.

The solar energy market has grown exponentially over the last several years, as nearly $2 billion of venture capital flooded the marketplace worldwide. The stock market value of solar energy companies ballooned 4,750% globally between 2003 and 2007, proving that Canadian Solar is in the right panel.

The company designs, manufactures and sells a range of standard solar modules for use in a variety of residential, commercial and industrial solar power generation applications. The company also designs and produces custom solar modules and products built to its customers' specifications.

The solar energy market is booming in all the places where the company has customers. Germany, for example, is the world's largest market for solar panels; Spain, which provides generous government subsidies for energy alternatives, ranks just behind Germany and is building Europe's largest solar energy plant. Japan is the third largest solar market and the world's largest net exporter of photovoltaic solar cells and modules. The United States is a distant fourth, but the domestic solar market grew 57% in 2007. In China, companies are pouring millions into solar power operations across the country to capitalize on Beijing's goal of having renewables make up 10% of all energy use by 2010.

Although solar power may account for less than 0.01% of the world's total energy production today, the demand for solar has grown about 30% annually over the past 15 years, according to SolarBuzz, a solar energy research and consulting firm (comparatively, the demand for fossil fuel-based energy sources has grown between 0% to 2% per year). And some experts predict solar energy has the potential to make up 10% of total energy production within the next 20 years.

Even so, the solar industry faces some formidable obstacles, including worldwide polysilicon shortages, inadequate government incentives, compatibility issues with . . .

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