A blackout for sun power

Drowning in renewables? Solar power stocks get hammered on oversupply concerns

Published September 10, 2008 2:14PM (EDT)

The U.S. stock market surged on Monday and swooned on Tuesday, but one sector stayed consistent throughout. Solar power company stocks got killed.

The apparent reason: Investors are worrying that an oversupply of solar panels in 2009 will result in downward price pressure that wipes out profit margins.

The carnage is playing out exactly as predicted in January by Jerome Ball, an obsessive follower of solar stocks at his Alternative Energy Trading blog. (See "Pop Goes the Solar Bubble?")

My prediction? The oversupply problem will disappear once we're all driving plug-in hybrids -- especially in regions that have renewable energy mandates. But government can help. If Congress truly is considering making $50 billion in low-interest loans available to the auto industry for retooling factories to produce fuel efficient cars, how about renewing the production tax credit for solar power while they're at it?

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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