There have been two types of obstacles that have existed for this group and for now there are no signs of improvement.
The first is the extent to which solar companies have relied on tax credits or other forms of subsidy for their customers to buy and install the product. This is not just a U.S. phenomenon but is also the case in Germany, as evidenced by that country's large weighting in the Guggenheim Solar Energy ETF (TAN)
Subsidies have played a huge role, but Germany and Spain have both been reducing these subsidies, threatening the future viability of the industry. This has not been an issue in the U.S. yet, but given the state of financial affairs here it would not be a shock to see subsidies cut. That would certainly be another nail in the coffin of the industry.
The other element has been how solar stocks and the ETFs have tended to trade. Before this year the correlation to oil stocks was very high. The logic was that as the price of oil goes up it generally benefits the oil companies but also creates more perceived need for solar products. When oil prices went down it generally hurt oil companies but created less urgency for solar products.
This year that dynamic seems to have changed as the Energy Sector SPDR (XLE)
This past week First Solar (FSLR)
Another fundamental threat to the industry comes from Chinese solar companies and accusations that they are creating a supply glut which is hurting all competitors -- including Chinese companies themselves as most of those stocks are down 60% for the year, faring worse than the ETFs.
There could always be a "back from the dead" trade on these names and I would expect them to rally should the price of crude oil put in a repeat of 2008 when it went to almost $150 per barrel. The conflict here is investing with the heart vs. logical investing. A lot has to go right for these stocks to achieve the potential perceived in 2008 and that seems very unlikely.