When Solar Leaders Fall More Than Oil Giants… On Oil (FSLR, STP, SPWRA, TAN, XOM, SLB, OIH)

Solar stocks are again trading no differently than a leveraged bet on oil prices.  This is something we have noted on many occasions and with oil down by another -$2.59 at $64.14 per barrel in NYMEX WTI, that is looking to be the case again.  An analyst call on First Solar, Inc. (NASDAQ: FSLR) is not helping, and these two outside issues are bringing down Suntech Power Holdings Co. Ltd. (NYSE: STP) and SunPower Corporation (NASDAQ: SPWRA).

Even the Claymore/MAC Global Solar Energy (NYSE: TAN) is getting hit.   Where this gets interesting is that oil giants Exxon Mobil Corp. (NYSE: XOM) on the integrated side is down only 1.6% and Schlumberger Limited (NYSE: SLB) on the services side is down less than 3% at $51.00.

Including June 1, 2009, First Solar, Inc. (NASDAQ: FSLR) would have closed down on 16 days if you include today.  The NASDAQ 100 measured by the looks to be down only 12 days in the same period.  Shares are down over 4% at $147.51 in late morning trading.  The stock is now down more than 25% from the late-May highs when shares were hitting $200 again.  Barclays took its target down to $175 today.  Suntech Power Holdings Co. Ltd. (NYSE: STP) is down over 7% at $17.01 in fairly active trading.  SunPower Corporation (NASDAQ: SPWRA) is down close to 7% at $24.47.

Claymore/MAC Global Solar Energy (NYSE: TAN) is getting hit as well, with its shares down over 6% at $8.87. The Oil Services HOLDRs (NYSE: OIH) is also down less than 3% at $90.01 today.

We recently noted how venture capital and private equity finally staged a small gain in investing for Q2.  Unfortunately, that was not so for solar power.

T. Boone Pickens is supposed to be issuing a new oil price target this week, but whether that will happen is not clear. What Pickens may not know is that if he can run up the price of oil with a wild prediction, he might be able to doubly-influence solar shares.

Outside of the investment side of the equation, there is a silver lining here.  If you have been wanting to commit to solar installations, as a buyer you have what are generally the cheapest prices ever, the lowest buyer competition and wait times than ever, and there is the new incentive program that is expected to assist you in your decision.

Jon C. Ogg
July 6, 2009