This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Lower Energy Prices Throw a Cloud Over Solar

NEW YORK ( TheStreet) -- News of metals setting new records for how far they fell Monday was widely covered.

The S&P Gold Trust ETF (GLD) fell over $13 by the end of after-hours trading on Monday compared to Friday's close. The iShares Silver ETF (SLV) fared even worse on a percentage basis. SLV fell over $3, or 12%. (Both are higher in recent trading, with GLD up 2.3% to $134.30 and SLV up nearly 4% to $22.92.)

Both these widely followed metals didn't exactly have a fun start into the weekend either. Friday was one of the worst days for both in a long time and Monday more or less pushed on the accelerator to increase the intensity of the fall.

What you may have missed is that the United States Oil ETF (USO) has a similar chart pattern and has stepped over the cliff to join the metals. Oil leads the way and is the primary influence on inflation, which in turn pushes gold higher or lower.

The price of oil and natural gas as seen by the United States Nat Gas (UNG), directly influences the viability of alternative energy such as solar. For solar bulls, lower energy prices spell trouble. (See my warning about chasing solar. )

About a week ago, many solar names jumped on news of greater efficiency and lower cost. First Solar (FSLR - Get Report) was busy announcing several developments. First Solar announced it is acquiring TetraSun, expects greater revenue for 2013 and expects to produce 40-cent-per-watt cells by 2017. Investors enthusiastically welcomed the announcement for First Solar, which gave a boost to other solar names.

First Solar went from an April 8 closing price of 27.04 to a closing price the next day of $39.35. LDK Solar (LDK) closed April 8 at $1.07 and closed the next day at $1.38. Trina Solar Limited (TSL) and Suntech Power Holdings (STP) also made similar moves higher.

Since April 9, none of these solar companies have closed higher, and most have fallen back to under or near the closing price before that day.

First Solar is the only company that hasn't totally fallen back to the previous lows. However, investors in the solar space have a much greater problem on their hands. If the price of oil declines, demand for alternative energy sources, including solar, will as well.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
USO $11.30 0.71%
UNG $6.93 3.66%
FSLR $55.84 -2.07%
AAPL $93.74 -1.15%
FB $117.58 0.73%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs