Solar Shares Collapsing; Where's the Bottom?

As far as I can tell, the sun is operating normally.

But you might think otherwise, judging from this week’s action in solar stocks. The sector, which suffered considerable losses yesterday, today went into freefall, with many names in the sector suffering losses of more than 10 percent. Exactly why investors decided to bail on the stocks today is unclear, but there are a number of factors that appear to be contributing to the current solar scare.

Lehman analyst Vishal Shah wrote a note on the solar sector that, in general, was quite bullish and, in fact, repeated his recommendations on First Solar (FSLR), SunPower (SPWR), Suntech (STP) and JA Solar (JASO). But Shah also noted that most solar companies have provided “somewhat aggressive guidance” for 2009 on the assumption that poly supply would become readily available from the spot market or silicon partners.

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