It's a well-known fact that China's solar panel companies like Suntech Power Holdings Co., Ltd. (NYSE:STP) and Trina Solar Limited (NYSE:TSL) have been eating the lunches of their U.S. counterparts on the solar power playground - First Solar, Inc. (NASDAQ:FSLR) and SunPower Corporation (NASDAQ:SPWRA) just didn't have any way of putting up a fight, unable to compete on price, and unable to find a domestic market to help with sales.



Funny thing about "well-known facts" though... the assumptions may stay the same, but over time, reality can change.



As it turns out First Solar, Inc. and SunPower Corporation may have turned the tables on Suntech Power Holdings Co., Ltd. and Trina Solar Limited thanks to - surprise! - a much better U.S. solar market than most investors realize, and a much more marketable pricing framework now that solar panels have come down by 30% since 2010.



It happens within all industries, but to none more so than solar panel makers. It's getting pushed and pulled from all directions.... the feared loss of subsidies is bad, but renewed tax credits help. Expensive oil and gas are good, but skyrocketing silicon (and panel) costs hurt. China can make panels cheaper, but a brewing complaint about - and potential tariff on - unfairly subsidized Chinese solar panels is close to becoming a matter of government policy. No wonder all these stocks have been sling all over the place.



The dust is settling though, and that's good for United States' solar panel manufacturers. See, the solar market in the United States isn't what t was ten years ago, when solar was so very "someone else". The U.S. solar market isn't even what it was three years ago when other energy prices were soaring. Here's a quick reality check:

The U.S. solar power production industry grew nearly 70% in 2012, so much so that the U.S. was (and you're not going to believe this) a net exporter of solar-related goods to China last year

Installations of solar panels in the United Sates are up more than 60% year to date (compared to 2010)

Solar panel prices have fallen by about 1/3 over the past two years, taking a big chink of the mental roadblock out of the picture (cost)

The U.S. is now projected to be one of the biggest solar panel markets in the world within a few years

That's not to say the industry hasn't got its problems. While demand is broadly growing, the capacity that was built three or more years ago is still not fully needed. As is the case with so many industries though, the bigger and better survive, and acquire or destroy the smaller and weaker. The good news for First Solar, Inc. and SunPower Corporation investors is, they're the domestic 'bigger and better'. The good news for Suntech Power Holdings Co., Ltd. and Trina Solar Limited investors is, they're China's "bigger and better". They're not apples to apples anymore though.



Though no specific red flags are waving for STP and TSL, let's face it - China's been riddled with too many 'accounting irregularities' and outright sham companies to blindly assume its two solar panel giants couldn't have at least similar symptoms. More than that though, China's excess production capacity makes the rest of the world's excess capacity look like chump change (though it too is installing a great deal of what it makes). And now with a potential tariff on Chinese imports of solar panels into the U.S., the camel's back may be broken.



At least with U.S. solar panel companies, investors enjoy a little more transparency. More than that though, American solar panel makers like First Solar, Inc. and SunPower Corporation can compete on price (though still ultimately losing to China on that front). After factoring in shipping and the pride factor though, at least domestically the U.S. panel makers are starting to win significant market share.



As is stands right now, FSLR is trading at 10.7 times its trailing earnings, and a very plausible 5.9 times its projected 2012 earnings. SPWRA currently trades at 2.65 times its trailing-twelve-month earnings, and 5.9 times its expected per-share income in 2012. Yes, margins will take a hit as polysilicone prices fall (along with panel prices), but what the market may not be seeing is the trade-off with volume.... the cheaper solar power is, the more units both companies will sell, and the stats have already shown America is very interested in solar power at these $1.20-ish per-watt prices (far more enthusiastic than most would have expected).



To be fair, it still won't fully offset (mentally of fiscally) the upside of higher-priced panels that were at least partially subsidized via tax credits or the newer leasing plans being offered by many utility companies - and Google as well. But, the market appears to have overshot just how bad things are going to hurt, sending FSLR, TSL, STP, SPWRA, and all the rest of these stocks down more than 50% in less than three months. With the worst-case scenario more than baked in, now could be a great time to stake a claim in the quietly growing U.S. solar industry.... with U.S. players.