You watched An Inconvenient Truth . Y'all swore off your beloved Nike Airs back when the company came under fire for running overseas sweatshops. And every time you lot plunk that one-half-gallon of organic milk down at the Whole Foods checkout, you feel a niggling meliorate about the planet.

Then what about putting your portfolio where your principles are? That'south where "The Meaningful Investor" comes in. Every bit the private sector steps up with powerful, profit-driven solutions for huge world problems, a new and tantalizing possibility is emerging: the chance to do well while your money does some good. I'm nigh emphatically not talking about socially responsible investing, which usually boils downwardly to nothing more than avoiding "evil" stocks of tobacco companies and weapons makers, say–and sacrificing returns in the process. Instead, the premise here is that virtue need non be its own advantage.

So telephone call this a cavalcade nearly adept greed. I'll exist searching for investments where profits and the promise of a better world aren't at odds. Because this is an arena in which wishful thinking can trump sound judgment, I'll be taking a hard-nosed approach. Many "green" investments, for instance, offering smashing stories and big ambitions, along with inflated valuations and unproven markets. Sound familiar, Cyberspace investors?

Solar power is a case in point. In that location are a dozen or so publicly traded companies that industry solar materials or systems. And some large-proper noun billion-dollar investors–similar John Doerr at venture firm Kleiner Perkins Caufield & Byers, or Beak Gross, founder of the infamous Cyberspace incubator Idealab–are beyond bullish on the sector. Their hyperactive interest is helping to overheat solar stocks. SunPower , for example, a spin-off of Cypress Semiconductor that makes high-efficiency solar-power cells, was recently trading at more than than 166 times earnings. Again, audio familiar, Cyberspace investors?

Solar still has one big economic problem: It costs roughly twice equally much per kilowatt-hour every bit ability from the grid. But an unusual confluence of events is changing that calculus and making even jaded investors wonder if in that location isn't something more to solar than hype. Starting time, of grade, are rising petroleum prices. Truthful, they're off their highs, but you lot'd take to be a Panglossian optimist to look at the Center East and believe oil and natural gas will actually get cheap again. 2nd, fifty-fifty equally traditional energy prices rise, solar costs are expected to go on their descent. The cost of a solar kilowatt-hour has declined from 47 cents in 1990 to effectually 21 cents today, where it has been stuck for a while. But all that venture money should kickoff kicking in, helping companies refine their technologies and utilise fewer plush materials. Lower costs, in plough, will mean the ability to create more capacity. "We're seeing solar produced on a scale that's truly intriguing," says Scott Sklar, president of the green-energy consulting firm Stella Group.

The 3rd force that's changing the dynamics of solar is government subsidies. Uncle Sam at present gives a 30% tax credit to businesses that employ solar energy, and no fewer than 15 states offer hefty incentives of their ain. If y'all're a true free marketeer, this should give you the willies (and remind yous, unpleasantly, of the $ten billion spent to subsidize ethanol since 1980). But the manus of authorities is undeniably squeezing the cost gap between solar and fossil fuels.

One company that has been largely bypassed by the hype, but seems positioned to do good from solar's surge, is Evergreen Solar . Evergeen makes photovoltaic modules–the main component in solar-electrical systems–using a proprietary, cost-effective technology. Evergreen recently announced a four-year understanding to sell $100 million worth of its modules to Mainstream Energy, a visitor that sells and installs commercial and residential solar- free energy systems. Meanwhile, Evergreen's strategic partnerships with Q-Cells AG, a leading High german solar company, and Norwegian solar powerhouse Renewable Energy Corp., have helped the company plant a presence in European markets, where–natch!–government subsidies are far more generous than they are in the United States.

Evergreen's stock price has fallen past near half since striking a 52-week high of $17.50 last spring. That'due south considering of worries that a shortage of silicon, the pricey textile used to make solar cells, would injure all manufacturers. But Evergreen should be one of the least-afflicted companies, cheers to its silicon-stingy technology: "It's pushing the envelope when it comes to using less silicon per watt of electricity," says Mark Townsend Cox, founder of the New Energy Fund, which specializes in clean ability. That could brand Evergreen a buying opportunity, fifty-fifty though the company has still to earn a penny. (Analysts are forecasting earnings of 16 cents a share in 2008.)

As the individual sector steps up with powerful, turn a profit-driven solutions for huge world problems, a new and tantalizing possibility is emerging: the chance to practise well while your coin does some good.

Betting on a single pure-play solar stock is a risky move, and not 1 to be made with the mortgage money. Investors looking to spread things effectually a bit may want to attempt the New Alternatives common fund. Its three-year annualized return of more than 15% outperformed its midcap blend category, and the fund's begetter-and-son managers, Maurice and David Schoenwald, invest heavily in solar companies, both in the United States and in Germany. But they also invest in all types of clean-energy stocks. So, if current of air power suddenly shoves solar out of the limelight and becomes the hot energy alternative, the fund will have hedged its green bets. As perhaps should you.

Investing in Solar Energy

2006 *through Aug.
Sources: Solar Energy Industry Association: Energy Data Administration

Walecia Konrad is an award-winning journalist who has worked at several leading business publications, including Smart Coin and Business Week. She specializes in investing and personal finance.