According to Eric Savitz of Barron's, the demand for solar power is so high that the solar industry has eclipsed the semiconductor business as the world's leading consumer of silicon wafers. This high demand has created a shortage of polysilicon, a material used in the manufacture of solar panels.
The obvious play on the polysilicon shortage is MEMC Electronic Materials (WFR), one of the world's largest producers of silicon wafers. Unlike some of its rivals, MEMC produces most of its own silicon, and in fact sells some excess supply back into the market. The result is that MEMC benefits from soaring wafer pricing without suffering the associated increase in raw-material pricing.
With solar energy catching steam in California, if solar panelled roofs become part of the government's agenda, stocks like WFR and ESLR will be huge winners.
The recent correction in this stock presents a great buying opportunity at or below 37.