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The demand for solar investments has been on the rise as the market sentiment for equities, and solar, in particular, has reached some of the highest levels we have seen for some time. As a result of that, we have seen some deals in solar suggesting that one, the demand for solar is there, and two, there is more to come with such a strong push into the sector. Here is a quick rundown:

In mid-May, SolarCity (SCTY), a leading provider of clean energy, announced a lease financing agreement with Goldman Sachs (GS) to fund more than $500 million in solar power projects; an estimated 110 megawatts in generation capacity for homeowners and businesses. SCTY reacted favorably to the news as the stock jumped 26% and another 15% on the following day. The gains were seen throughout the whole space as the Solar ETF (TAN) jumped 9% over the span of 2 days.

We have also seen IPO news in the space and a few big-named players entering the market.

At the end of June, Wells Fargo (WFC) announced that Wells Fargo subsidiaries plan to invest more than $100 million of tax equity financing in 2013 and 2014 combined to fund U.S. solar photovoltaic distributed generation power projects developed by SunEdison. These new investments build on the relationship that first began between Wells Fargo and SunEdison in 2007. Since 2007, Wells Fargo has provided more than $950 million of tax equity and construction financing for more than 200 utility and distributed generation solar projects developed by SunEdison.

In early-January, MidAmerican Solar, a Berkshire Hathaway (BRK.B) company, and SunPower (SPWR) announced MidAmerican Solar's acquisition from SunPower of the 579-megawatt Antelope Valley Solar Projects, two co-located projects in Kern and Los Angeles Counties in Calif. Together, the two combined projects will form the largest permitted solar photovoltaic power development in the world and will create an estimated 650 jobs during construction. The move sent the shares higher as SWPR rose 48% on the day and other solar stocks saw similar strength in their shares with Warren Buffett now clearly standing behind the struggling industry at the time.

NRG Energy (NRG), the utility giant and one of the bigger investors in solar in the utility space, announced in early June that it filed a registration statement on Form S-1 with the SEC in anticipation of a proposed IPO of NRG Yield. NRG Yield was formed by NRG to own and operate a diversified portfolio of long-term contracted renewable energy, conventional generation facilities and thermal infrastructure assets in the U.S.

Further documenting the demand for solar comes in the performance of the Solar ETF, which is up more than 50% year to date versus a mid-teens gain for the S&P 500. With that said, here are two solar stocks that should stand to gain from a continued interest in solar:

First Solar (FSLR) is the big solar player with revenues in the $3 billion range. FSLR has seen its revenues nearly triple over the past 5 years as the company continues to cement its status as the leader of the developing industry. Still, despite its status as the clear leader in solar, the company just sports a P/E of less than 10, which is considerably cheap and suggests that the shares are undervalued. To give some perspective, a P/E multiple in the 10 range is typically assigned to slow growing, mature companies. JP Morgan (JPM) has a P/E of 9.8. Exxon Mobil (XOM) has a P/E of 9.4. These are some of the biggest and most stable companies who are posting revenue growth in the low single digit percentage range not companies who have seen their revenues triple over the past 5 years.

SunEdison (SUNE), formerly known as MEMC Electronic Materials, engages in the development, manufacture, and sale of silicon wafers as well as developing and selling photovoltaic energy solutions. Unlike FSLR, the company has debt to the tune of $2 billion net of cash. Like FSLR, the company has benefited from the renewed interest in solar and shares are now up 160% year to date. With earnings season upon us, SUNE's shares may stand to benefit greatly with its history of earnings beats. Three out of the past four quarters the company posted earnings beats of at least 8 cents. 12 analysts cover the shares with them projecting EPS more than tripling next year to 52 cents on revenue growth of 25%, more than justifying the 16x forward P/E multiple the shares are at.

The last stock company is Canadian Solar (CSIQ), which has significantly more emerging markets exposure than the first two listed. The potential is clearly there as emerging market countries will require a massive volume of new investment in the coming decades just to meet basic energy needs, according to emerging markets solar firm P2 Solar. China, which now accounts for more than 50% of global solar manufacturing capacity, recently announced a new national target to install 21 GW by 2015, following two upward revisions in 2011. India has set ambitious targets for solar power via the National Solar Mission as well as state government backed solar policies that are on top of the National Mission.

CSIQ has seen its shares rocket as the sentiment in solar shares quickly turned over the course of the past 6 months. Trading at nearly 20 times next year's EPS, the valuation is justified with more room for multiples expansion as CSIQ is expected to post extremely strong growth figures this year and next to the tune of 42% revenue growth in fiscal 2013 and another 31% on the top of that in fiscal 2014. As do most other solar companies, CSIQ has debt on its balance sheet of about $1.4 billion but with close to $600 million in cash, the company has enough of a cash cushion to ride out any turbulence in sector in case we fall back into weak macroeconomic conditions.

Source: Solar City Goldman Sachs Deal Highlights Solar's Investment Appeal