Monday, December 22, 2014

It's Been a Lousy Year For Solar Stocks (FSLR; TAN)

They're going lower so we'll stick with the comments from early November:
The only part of solar we're interested in at the moment is the financing and even this offers lower expected returns than, say, shorting shiny rocks....
Here's the largest U.S. domiciled solar company, First Solar down 17.59% year-to-date:

And the Guggenheim Solar ETF, down a less brutal 2.76% ytd:
The headline at Yahoo Finance is pretty funny:
Solar stocks sucking wind, why you should steer clear
because the writer conflates the crash in oil prices with the decline in solar stocks even though there is no overlap in their markets and almost no substitution of one for the other.

Mixing-up stuff just because their output can be measured in BTU's or joules or whatever really can be amusing especially if you recall that SunEdison's big news in November was that they were getting into wind:
Solar: SunEdison Saves the Day (SUNE; FSLR; TSL; TAN)

Here's the Yahoo story:
As consumers cheer cheaper oil prices, the perceived need for so-called alternative energy has become less urgent and so has the desire to own those stocks. “People are going to run from solar.” observes Jon Najarian, co-founder, of OptionMonster and Yahoo Finance Contributor.
Some investors already have. Shares of First Solar (FSLR) are down more than 18% this year and SunPower (SPWR) nearly 15%. SolarCity (SCTY) shares have faired better, falling just 5%. This month the company secured $400 million in financing from Bank of America (BAC) to fund residential projects. Elon Musk, best known as Tesla’s (TSLA) CEO, is also chairman of SolarCity.

As oil becomes more affordable, Najarian thinks the solar industry may be facing fewer government subsides. “There is a direct correlation with crude, I believe, and that kind of energy. Without government subsidies increasing a lot of those companies are going to be in trouble.”...MORE
The solars are going lower but not because of oil.

FSLR   44.11 Down 0.92
SPWR 25.57 Down 0.18
TAN    34.03 Down 0.18 

Watch the Chinese stocks, Trina or Canadian Solar for example, for signs of a turn.
TSL      8.26 Up 0.17
CSIQ  21.81 down 0.10