Reports have shown that the US solar market is on fire. Installation of solar panels is expected to soar by one-third this year. The price of solar power is now cheap enough and can efficiently compete with gas and coal-fired power in places like California.

President Obama has also announced a groundbreaking plan aiming to curb power plant emissions. And there are expectations that China's currency devaluation can also cut panel costs for US solar installers.

However, Wall Street has been dumping down solar shares this year, which as per investors is misplaced. It has been said that stock prices have also suffered due to oversupply of new equity by companies raising capital to fund their rapid growth and concern an interest rate hike by the Federal Reserve could curb the appeal of their so-called yieldco units.

The MAC Global Solar Energy index .SUNIDX has dropped 36% since its 2015 high in April, with industry bellwether SunEdison Inc having lost 555 of its value since July 20.

SunRun Inc (RUN.O), one of the top residential solar installers, went public last week at $14 a share and closed Thursday at $10.12.

According to regulatory filings, Hood River Capital Management of Portland began shedding its stake in SunEdison earlier this year, and kept selling last month after the company announced a deal to buy rooftop solar installer Vivint Solar Inc making it third acquisition this year.

Hood River Capital Principal Brian Smoluch said investors seem concerned that the company is doing too much too fast, that its capital requirements could be too high, and that project development margins would be squeezed.