Investing in clean energy takes a very strong stomach. Share prices in this sector continually soar and plunge depending on whether investors are feeling optimistic or pessimistic. Although the industry may never live up to the grandest hopes that some had expected, it is clearly emerging as a viable business with real profits and likely moderate long-term sales growth rates.

Poring over the dozens of publicly-traded companies in this sector, I took a fresh look at three names that had been considered future industry leaders, but now see their shares trade quite far from their 52-week highs. Here’s a deeper look:

American Superconductor (Nasdaq: AMSC)
This company was founded more than 20 years ago to develop cables that could carry high volumes of electricity. But those cables were quite expensive and few utilities were willing to make heavy investments in the technology. So management shifted gears early last decade and moved into the wind business, acquiring a small developer of wind turbines and related electronics. That move proved quite prescient. Annual sales, which had been stuck in the $40-$50 million range in the middle of the past decade now exceed $300 million. And after years of losses, American Superconductor finally turned a profit last year.

Much of the company’s growth is coming from a massive supply agreement with China’s Sinovel, one of the world’s largest builders of wind farms. Concerns often arise that Sinovel’s demand will peter out, but the company continues to renew its contract with American Superconductor (Sinovel signed on for another $445 million long-term deal with American Superconductor in mid-May). It’s important to remember that China’s plans for clean energy are only getting started, and spending should remain robust for quite some time as the country’s electricity needs to continue to soar.

Yet a curious disconnect has emerged. Even as American Superconductor tops estimates every quarter and analysts steadily boost their forecasts, the company’s stock steadily drifts lower. After moving past $40 early this year, shares now trade below $27. Despite that downward move, investors should know that this is still very much a growth story. Sales and profits should rise at least +30% this year and another +20% in fiscal (March) 2012. Shares now trade for a very reasonable 17 times projected 2012 earnings.

A-Power Energy (Nasdaq: APWR)
This company has vexed even its most bullish supporters. The China-based supplier of wind turbines and energy distribution systems always manages to boost annual sales at an impressive clip, but quarterly results are far more erratic. In some quarters, sales greatly exceed forecasts while profits lag, while in other quarters the opposite is true. In recent quarters, profits have lagged, and analysts have been lowering their earnings forecasts. Many investors have simply given up, as the erratic quarterly performances lend the impression that management doesn’t have a handle on the business.

Of additional concern, the company consumes huge wads of money on its capital-intensive projects, which is hampering free cash flow. But as those investments are completed, free cash flow should increase nicely. In the near-term, investors should stick with traditional GAAP earnings as a measure of the company’s value. And those above-cited concerns, legitimate as they are,  overshadow a compellingly valued stock. Shares have sharply fallen in each of the past four trading sessions and now trade for about five times next year’s GAAP profits.

SunPower (Nasdaq: SPWRA)
This company, along with First Solar (Nasdaq: FSLR) had perennially been considered to be one of the strongest solar power companies, thanks to a strong technology base, a deep set of customers and ample manufacturing capacity.

Sunpower’s primary focus is on large installations, such as on the roofs of Walmart (NYSE: WMT) stores. And based on its technology roadmap, the company’s competitive position should only get stronger in this market. That’s because Sunpower’s solar power panels will soon convert 23% of the sun’s energy into electricity, which is roughly 20% to 30% better than past energy conversion ratios. That means customers will reap an even greater payback on their investment and reduce the break-even time on what is a costly investment.

But shares are off sharply this year as it has become increasingly evident that the company’s business model is not yet helping to generate cash. SunPower has generated negative free cash flow in every year of its history (even though the company is profitable on a GAAP basis). Making matters worse, EPS in the March and June quarters was fairly weak and should be again in the current quarter before an expected massive profit spike in the fourth quarter as the company is finally able to recognize revenue from some large projects.

Yet you can make a case that shares have found a floor as they trade right at tangible book value. And even if free cash flow is wanting, operating cash flow is fairly healthy — and shares trade for just six times projected 2010 operating cash flow. Backlog is fairly high, which should lead to strong sales and profit growth in 2011.

SunPower is clearly a “show-me” stock. Investors need to see more impressive bottom-line results and a path toward rising free cash flow. Management insists these trends will start to be in evidence later this year. If so, shares should move up nicely from their lows, especially since the stock is very heavily shorted, and short-covering would boost buying pressure on the stock.

Action to Take –> American Superconductor remains one of the strongest operators in the field, and it’s unclear why its shares have fallen out of favor. As investors renew their affection for growth stocks, this high-growth name should move back into favor.

As for A-Power, investors should simply expect erratic short-term quarterly results and focus on the long-term. The company is emerging as a leading provider of clean energy technologies in China and elsewhere. The Chinese government is throwing big bucks in support of clean energy and favors domestic suppliers. A-Power still looks like a great way to play that market, and shares are quite cheap.

SunPower has had major growing pains, but still looks poised for a string of sales growth, and eventually rising cash flow.