Market troubles hit solar stocks

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The MAC Global Solar Energy Stock Index has tanked for the past week, its second severe slide in only two months. The index fell from $159 on Monday August 17th to $135 on the morning of the 24th.

MAC serves as a tracking index of the Guggenheim Solar Exchange Traded Fund on the New York Stock Exchange, and includes the stock of more than two dozen of the world’s largest solar companies. As such, it serves as a general indicator of the health of solar stocks.

Stock prices in MAC have generally been in trouble this summer due to a false association in the minds of investors between the viability of solar and oil prices. The index fell from around $220 in mid-June to its current lows, just as global prices of Brent and WTI Crude oil fell from $60-$65 a barrel to current prices of $40-45.

However, over the last week has not only been oil prices falling, but stock values in general, in markets around the world. The Dow Jones Industrial Average fell from 17,545 to 16,460 during one week from August 17th to 24th, and fell further Monday morning to around 16,200 at noon on Monday. This is the Dow’s most severe fall since at least 2011.

This crash has affected even stocks like First Solar which had rebounded in August despite the ongoing oil price slide, and furthered declines at SunEdison, which has been particularly in crisis following investors reacting badly to the company’s second quarter earnings.

"The stock market has been extremely volatile ever since China devalued its currency amid growing concerns that the economy is growing slower than previously anticipated," explains Mercom Capital CEO Raj Prabhu. "Stock markets are down globally."

"As I have said before there is little correlation between solar industry fundamentals and the stock performance of publicly traded solar stocks which started sliding with the further fall in oil prices. That said, this could have a negative effect on public market fundraising in the short-term as the companies will have to raise financing at lower valuations."