Solar ETFs Drop Sharply After Reports Of Panel Glut

Solar stocks and exchange traded funds (ETFs) plummeted after oil prices fell lower and investors worried about an oversupply of solar panels.

One analyst at Lehman says the sell-off could be because of a misinterpretation of statements made by a solar executive, reports Dirk Lammers for the Associated Press.

Oil fell to $103.26 today - its lowest point since April 1.

In a note to clients, SunPower Corp.’s (SPWR) CEO made comments about price declines that were inconsistent with estimates provided during the company’s second quarter earnings call. The Lehman analyst maintains a positive rating for the sector, but that continued volatility is expected until Spanish and U.S. market government incentives are resolved.

The analyst says 2009 is expected to be a year of transition for the sector and predicted that tight supply could continue.

Both solar ETFs took a big hit in trading today. Market Vectors Solar Energy (KWT) lost 11.2%, and all of its top 10 holdings declined, led by JA Solar Holdings Co., Ltd. (JASO), which lost 17%. Claymore/MAC Global Solar Energy (TAN) also saw all of its top 10 holdings fall, and the fund overall lost 11.9% today. JA Solar was the biggest decliner in TAN, as well. The company is 4% of both TAN and KWT.

KWT is down 27.4% since its April 23 inception, while TAN is down 25.4% since its April 15 inception.

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