First Solar, Inc. (FSLR), Sunpower Corporation (SPWR): Invest in Solar to Help Decrease Water Scarcity

Trina Solar Limited (ADR) (NYSE:TSL) is one Chinese solar manufacturer that is best avoided. Only recently did it launch its headquarters for operations in the Asia Pacific, Middle East and Africa regions. Trina has a significant debt load with a total debt to equity ratio of 1.56. The company isn’t expected to make money in 2014. With the recent Suntech bankruptcy, the Chinese government has made it clear that it isn’t writing a blank check for the solar industry.

Currently the company is in a partnership with the Solar Energy Research Institute of Singapore to target a 21.5% production efficiency; a number already achieved by Sunpower. Between high debt loads, a depressed profit margin of -20.6% and expected losses in 2014, Trina Solar is not a promising company.

Conclusion

Water shortages need to be dealt with. Solar powered desalinization plants are a great solution. Saudi Arabia is already proving their viability. SunPower Corporation (NASDAQ:SPWR) is a strong investment with its high efficiency technology and connections in Saudi Arabia. First Solar, Inc. (NASDAQ:FSLR) is a good second choice, but it will be important to see if the company is able to substantially increase module efficiency. Trina Solar is best ignored with its high debt load and negative earnings.

The article Invest in Solar to Help Decrease Water Scarcity originally appeared on Fool.com.

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