Let me say something in advance: what is good for the investors is often bad for the society, and vica versa.
I had been working in the green space for some ten years, but I'm still following the industry related news. It was a bit shocking to see in the US election aftermath the coal company shares rally and the renewable sector plummet. It was a terrible headline, but clean energy is under significant pressure for some time.
The best proxy for the solar industry is Guggenheim Solar ETF (TAN). Sowing it with SPDR S&P 500 ETF (SPY, right axis, orange) on the same chart, leaves no doubt, that it has been under huge pressure from 2011. If I recall it right, the German rooftop subsidies were running out that time and the government was reluctant to replace it with similar measures.
But I don't think that the main problem is regulatory related. Of course, regulation is very important until PV economics doesn't break even the fossil mix average prices. I think the main issue here is the competition. It is bad news for the investors, but very good news for the society. There are many PV panel producers on the market. The mostly traded companies (First Solar, Trina, Yingli, JA, Canadian, Suntech) market share is only some 35%, whereas other (no-name I may say) producers make up 48%. This suggest that barriers to entry are very small. One might thing it is a sophisticated technology. I think relative to semiconductor industry (approaching quantum physics theoretical limits) it is not a rocket science. Probably that is why the technology develops so fast.The price Wp is declining extremely rapidly. It is difficult to compare the costs with the traditional electricity generation (average cost vs marginal cost issue), but at some point it will competitive without subsidies. It might come sooner than we may think at the moment.
The best proxy for the wind industry is First Trust ISE Global Wind Energy Index Fund (FAN). The similar chart with SPY looks a bit better, but still not for putting my pension into this instrument.
The competition here is less intense, but still enough to drive the prices down by some 30% since 2008. Obviously the cost cutting potential here more limited relative to PV. I have to admit, that due to lack of tradable companies I followed much less wind industry developments, so I have much less understanding. But to me it is blade design, generator, voltage and frequency control and civil engineering. There is nothing they don't teach you in the university. People say that it is (obviously at some places) even now competitive with traditional power generation. But wind project development is much more difficult than a rooftop installation.
I can't exclude Tesla Motors Inc (TSLA) here. It is not a clean energy company (yet), but very much associated with the green industry. The usual chart again:
Yes, participating in the IPO was a very good investment so far. The question is will it be a good investment in the future as well? As an electric car-maker I don't think so. The German auto industry is coming to the marketplace soon with very competitive models. They develop their new electric cars with full throttle. Make no mistake, if the German car-makers commit to something, they will make it in very good quality and efficiently (unless it is some sort of software related minor technical issue:). Tesla US subsidy will also run out early next year. So the pressure on margins will be substantial that won't help the share prices. Musk is an extremely smart guy and perhaps that's why he is pushing SolarCity Corporation (SCTY) acquisition. And that is where we come back to clean energy. His vision about total off-grid vertical integration is really a great idea. The big question is whether it can be done globally. Is there an economies of scale, know-how or something else that would require big players on the market. I have some doubts. Projects are small, require flexibility that is not for the big companies, local guys are much better in that.
So the bottom line is that clean energy is not where you can make big money as an investor now. The competition is intense due to lack of barriers to entry. But, this is a very good news for the society. Prices are declining rapidly and the innovation is fast. Hopefully the industry soon will need no more subsidies, that should result in a kind of boom. It would be great for all of us and the investment setup will also change significantly. There are still a lot of problems to resolve that are not in the hands of the competitive space. Grid management is still a big challenge. But this is where utilities can do their part and politicians love to pass the costs to someone else.