Reuters: Solar energy on fire, except on Wall Street
BUSINESS RECORD STAFF Aug 14, 2015 | 8:48 pm
1 min read time
289 wordsAll Latest News, Energy, InsuranceInstallations of solar panels are expected to soar by a third this year, the price of solar power is now cheap enough to compete neck and neck with gas and coal-fired power in places like California, and the fledgling industry received a vote of confidence last week when U.S. President Barack Obama announced a groundbreaking plan to curb power plant emissions, Reuters reported.
Wall Street, however, has been dumping solar shares this year, largely over fears that tumbling oil prices will sap demand for alternative energy, even though oil isn’t used to generate power.
Stock prices are also suffering from an oversupply of new equity issues by companies raising capital to fund their rapid growth and concern that an interest rate hike by the Federal Reserve could curb the appeal of their so-called yieldco units.
The carnage has intensified in the last two weeks. The MAC Global Solar Energy index has dropped 36 percent since its 2015 high in April, with industry bellwether SunEdison Inc. having lost 55 percent of its value since July 20. SunRun Inc., one of the top residential solar installers, went public last week at $14 a share and closed Thursday at $10.12.
Hood River Capital Management of Portland, Ore., began shedding its stake in SunEdison earlier this year, according to regulatory filings, and kept selling last month after the company announced a deal to buy rooftop solar installer Vivint Solar Inc. — its third acquisition this year.
Investors are 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, Hood River Capital Principal Brian Smoluch said.
Here’s a previous Business Record story on the potential for a solar boom in Iowa.
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