China plans for its future with solar subsidies

China, like all countries, faces an energy conundrum. As long as the world economy struggles, oil prices will stay low. After all, the recession popped the oil bubble.

Now that signs of a rebound are appearing around the globe, oil is rising. Already, crude has climbed 68% from its mid-December low. One gets the sense that oil prices may trace any economic healing.

Another surge in crude prices would threaten China's growth. The emerging giant, now the world's No. 3 economy, needs solid growth to provide jobs to its booming work force, as millions of rural folk seek factory jobs.

At the same time, China is the world's biggest coal burner and the biggest emitter of greenhouse gases. China is choking on its own pollution. Its need for a clean, secure and renewable energy source is painfully clear.

Solar-power stocks rallied on the news, with torrid gains for the China-based issues. Suntech Power Holdings, Yingli Green Energy, Trina Solar, ReneSola, Solarfun Power Holdings and JA Solar Holdings soared between 40% and 44%.

Solar stocks were, until the middle of 2008, the market's hottest.

But those leaders topped out well before crude hit its $147 peak, in July. Oil's crash only added to the rush to dump alternative fuel technologies such as solar stocks.

Like most of history's great leaders, their downfall was harsh.

Even after the huge gains, many of these stocks are trading in single digits, more than 80% off their highs.