In August of 2009, solar energy stocks reported disappointing earnings despite vast political pushes towards alternative energy sources, and a global cry for reduced dependence on foreign oil. JA Solar Holdings (JASO), ReneSola (SOL), First Solar (FSLR) and Ldk Solar Co Ltd (LDK) all disappointed investors and market analysts, with some companies- JA Solar Holdings, for example- experiencing drops in revenue as much as 50%.

As we move further into the October/November earnings season, it’s time for these companies to once again step up to the plate and show how brightly they can shine. First Solar, as the major US contender in the solar power industry, reports on October 28, and the future looks dim. In August 2009, they warned of impending pressure from both global and national competition, as well as a new rebate program in Germany, and investors were concerned with what the future would bring.

This concern lingers as investors await earnings reports. Options analysts reported unexplained high votility for First Solar in June of 2009, and on October 27- one day before earnings- options activity was rampant. Trading volume totaled almost three times the daily average of about 12,000, with puts favored 1.37:1.00. Furthermore, the stock fell $3.85 a share on Friday, with the drops fueled by both this uncertainty as to what the future will hold and the disappointing results of competitors SunPower (SPWRA) and MEMC (WFR).

One remaining question exists- is First Solar suffering in part because the US is falling behind in the solar race, or is the concern fueled by the potential bidding wars between solar energy companies, reduced government incentives and other larger industry-wide problems that are partly responsible for the disappointing earnings across the board. If so, perhaps the question isn’t which solar stock is the best investment, but instead, why invest in solar stocks at all during this market and are any of these stocks going to be hot picks any time soon.

The rebound of solar stocks between October 5 and October 9, 2009, in which solar stocks outperformed both the Dow and Nasdaq, suggests that perhaps the future doesn’t look so dismal, but we’ll still need to wait until the end of this earnings season to see whether there is a potential light at the end of the tunnel.