I think it’s time to consider making a bet on the solar energy industry. You have to be selective and there’s no rush in this market, but this sector of the stock market has been in the doldrums for a while now and valuations are attractive. In addition, a lot of these companies are now saying that business is getting a whole lot better.

Consider Yingli Green Energy Holding Company Limited (NYSE/YGE). This Chinese firm is a major producer of photovoltaic (PV) solar energy products. Currently, Yingli is one of the largest manufacturers of PV products in China, as measured by annual production capacity. The company sells its PV modules under its own brand name to distributors located in various markets around the world, including Germany, Spain, China, and the United States.

Yingli recently reported a huge improvement in its third-quarter earnings. The company announced earnings of 68.2 million dollars, or $0.44 per American depository share (ADS), compared with earnings of 17.7 million dollars, or $0.12 per ADS, generated in the same quarter last year. Total revenues for the third quarter grew 50% to 490.9 million dollars. The numbers handily beat consensus estimates and the company raised its financial and shipment guidance for all of 2010.

Then there’s China Sunergy Co., Ltd. (NASDAQ/CSUN), which is a manufacturer of solar cell and module products in China. This company’s solar products are sold to Chinese and overseas module manufacturers for use in a number of markets.

The 2010 third-quarter revenues grew a substantial 57% to 125.8 million dollars and seven percent sequentially from the second quarter of 2010. Net income doubled to 15.4 million dollars, compared to $7.7 million last year. The company finished the quarter with 105 million dollars in cash, representing almost half the company’s current share price.

Not all solar energy companies are experiencing the renewed growth of others in the sector. Market leadership is beginning to stand out. There have also been some unenthusiastic research reports from Wall Street. I can understand why a lot of these stocks are trading for low valuations.

But, I feel that there’s going to be a breakout soon for a number of these shares. Once the Chinese equity market resumes an upward trend (which I think will next year), then these stocks could be on fire once again. Regardless of when this happens, the value is there right now.