Solar stocks are up almost 50 percent, on average, since the end of August, according to a note from Banc of America analyst Eric Brown on Wednesday. Gains have been fueled, in part, by speculation Spain will use more solar power. On Monday, Spain's Minister of Industry, Joan Clos, said a proposed incentive plan would triple the country's targeted solar capacity to 1.2 gigawatts from 400 megawatts.

China Sunergy rose $2.29, or 20.9 percent, to $13.26 in midday trading as shares of Solarfun Power Holdings Co. rose 22 cents, or 2.1 percent, to $14.07.

On the other end of the spectrum, JA Solar Holdings Co. fell $1.44, or 3.2 percent, to $43.86 as Applied Materials Inc. fell 65 cents, or 3 percent, to $20.97.

Applied reached a 52-week closing high of $23 in August and JA Solar, which went public in February, reached an all-time closing high of $48.57 in September.

Solar-product prices will remain strong in the near-term, Brown said, but will fall when Spain lowers its incentive by 26 percent next September as part of the proposal.

"At this point, we believe the high expectations for the Spanish PV (photovoltaic) market are now reflected in the solar stocks," Brown said. He recommended investors stick to "high quality" companies, like First Solar Inc. and SunPower Corp.

First Solar shares fell $2.18 to $129.35 as SunPower gained 37 cents to $87.37.

Also on Wednesday, LDK Solar Co. said it would supply $224 million worth of solar wafers to Solartech Energy Corp. over five years. LDK shares fell $2.43, or 3.6 percent, to $65.88. LDK, which had its initial public offering earlier this year, reached a high on Sept. 26, closing at $76.75.

Canadian Solar Inc. said Tuesday it has agreed to provide solar modules to American Capital Energy for an undisclosed sum. Canadian Solar shares rose 7 cents to $10.16 in afternoon trading.