The solar industry is a fantastic place to rake in short-term gains. But stick around too long and you will wonder if it would have been cheaper to heat your house with dollar bills.

Ready to burn an extra $3,000 each year? As if energy prices were not creating enough havoc throughout this country, the Obama administration is getting ready to pounce on the idea of a cap-and-trade system.

There is a good chance their plans could cost each of us a few extra grand each year.

Call the extra figures that will trickle into our monthly energy bills an investment on the future. Or call the increased costs a “usage” fee that goes straight to Uncle Sam. Just don’t call it a tax, as we all know Obama is a tax-cutter.

It is too early to tell if Congress will be naïve or stupid enough to pass any sort of cap-and-trade legislation in the near future, but it is certainly not too early to hear some of the nation’s best and brightest investors calling the idea what it is.

“Monstrously stupid,” is what Berkshire Hathaway’s vice chairman, Charlie Munger, called Obama’s plan.

Even if the majority of credits were given to the nation’s carbon-producing industries, Obama’s cap-and-trade system would almost instantly raise the price of just about every product and service sold in this country. It stands to be the most ineffective, yet most dangerous tax in the nation’s history.

Even so, emotional, feel-good investors are finding a way to profit.

Unsustainable investing

If you visit these pages often, you probably know my disdain for the green-energy industry runs deep.

It’s not that I hate Mother Nature and want to see the earth shrivel up and die (in another career I am an outdoors writer and nature junky). My hatred of the green investing movement is due to its infallible record of destroying wealth.

I started my career as a financial advisor, and my fiduciary duty to protect wealth still runs deep.

For generations folks have been working on electric cars, super-efficient solar panels and waste-based fuel sources. It has been one of the most predictable cyclical markets in history. Invest when energy prices are high. Lose money when prices naturally decline.

One company on track to lock investors into the cycle is First Solar (NASDAQ:FSLR). The company and its low-cost solar panels are making its in-and-out investors a pile of short-term profits. But if you are a set-it-and-forget-it kind of investor, you had better pay attention. The action will not last.

Set your sights on a long-term investment in anything solar, and you might as well forget about profits. The momentum fostered over the last six months or so is simply not sustainable. The government will not be handing out billions in stimulus for the next thirty years (I hope). New venture capital won’t be spurring the industry in a race to be a first mover. And most importantly, consumer demand will have long moved onto the next trend. We are a fickle nation.

Let’s face it. With current technology, solar panels cannot provide the kind of reliable energy the average consumer needs. Sure, a handful of “greens” will build their houses in a cloudless desert to make themselves feel good. But for those of us that live in area where moisture rules the middle atmosphere, solar panels are nothing more than expensive yard art.

So here’s my advice. If you can make a trading move with relative speed, invest away. The “green” industry will do well over the next six months while Congress gains votes debating cap and trade.

But if you are risk adverse and are investing for retirement, stay away. Stick with proven industries with high-quality revenue streams.

Until science is no longer a political debate (when did that start, anyway?), the solar industry will be too unpredictable for quality-minded investors.

Source: Solar Investing: My apologies in Advance