The birth of the mouse is a famous cautionary tale from Silicon Valley. In it, Xerox develops an early version of the now-ubiquitous PC pointer, but Steve Jobs and Apple actually make it ubiquitous. The warning—first movers don't always end up dominating a particular field—applies to another hot technology: solar power.

In June 2008, solar-panel manufacturers looked poised to conquer the world. The 12 largest had a combined market value of about $70 billion, according to Sanford C. Bernstein. Today, they are worth about $6.4...