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As the growth investor for Globe Investor's Strategy Lab series, I take a long-term perspective on stocks. I like to invest in companies that are leaders in important, emerging industries. One such industry that I'm not yet invested in is solar power.

Some of the big solar energy stocks have had stellar performance lately. Isn't this an obvious investment trend that I'm arriving at too late? I don't think so, and this underscores an important investing point: Instead of worrying about how long ago others discovered an important trend, focus on the growth ahead. Most of the technology trends I invest in were reasonably obvious to industry pundits at the time I invested in them. But they still weren't – and aren't – fully appreciated by the market and give me an opportunity to make a lot of money over a decade or more.

There are two historical problems with solar power that I believe are now being overcome. The first is cost, and the second is time-of-day availability. The cost of solar has come down significantly in the last several years, while batteries (which are also getting cheaper) are starting to gain a lot of attention as a way to store solar power for use when the sun isn't shining.

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According to a recent Deutsche Bank report, the cost of solar power generation is already at or below the cost of purchasing electricity from the grid in many U.S. states. According to Greentech Media's research division, solar installation volume has accelerated dramatically in the United States. Back in 2006, one system was installed every 80 minutes. By 2013, installation had grown 20-fold, with a system going live every four minutes. A full 12 per cent of all new U.S. power-generation capacity in 2013 came from distributed solar energy plants on people's roofs.

To put this in perspective, two-thirds of all solar energy systems in the U.S. were installed in the last two-and-a-half years. I don't think it's just tree huggers who are installing these systems, either. These are financial decisions. And for people who don't have $20,000 or more to invest up front in a solar energy system on their roof, solar leasing is a popular solution.

Within the sector, Solar City is a clear leader by market share in the U.S. It specializes in putting solar energy systems on homeowners' roofs. Solar City, and other companies like them, pay for the entire installation and recoup their money by signing the customer to a long-term energy-purchase agreement. Everybody wins because Solar City generates a healthy profit over the life of the solar-power system, while the customer pays less for power compared to their feed from the traditional grid. Customers can still use grid power, but most of their electricity comes from their roof, and if the grid goes down, they are still generating their own power.

Solar City's stock has been hot ever since its IPO in December, 2012. It first sold at $8 (U.S.) and now trades at about $60 and sports a market capitalization of $5.5-billion.

With performance like that, it must be overvalued, right? Not necessarily. The firm controls about 30 per cent of the U.S. residential market and is growing rapidly. Solar City's goal is to have one million residential customers by 2018, which would put them at only 2.4 per cent penetration in the markets they serve. Yet even at that small market penetration, the company's chief financial officer says, a power company of this size should generate about $500-million of cash flow per year. Suddenly a market value of $5.5-billion doesn't seem so absurd. In fact, there might very well be significant upside from here, which is why I'm paying close attention.

There's one other aspect to Solar City that I like. The chairman is none other than Elon Musk, the same entrepreneur who co-founded PayPal and Tesla Motors. There is an interesting connection beginning to form between Tesla and Solar City. Tesla is building a massive battery factory to support a huge ramp-up of electric car production. Tesla is also selling battery packs to Solar City to store solar power for use in evening hours, or if the grid goes down. So not only is the solar industry growing because it's potentially a lower cost producer of electricity, but homeowners can protect themselves from a power outage with a quiet, instantly available backup supply that recharges itself during the day.

If you're looking for exciting growth industries to invest in, I think solar power needs to at least be considered. I'm certainly not the first one to the party, but I'm confident it will still be going strong a decade from now.

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