Solar energy exchange traded funds are the worst stock ETF performers this year, suffering declines of more than 60% on weak prices as more firms go out of business.
Struggling economies are putting solar energy investment on hold while many utility companies are putting off renewable energy decisions. Solar ETFs have been left out in the cold.
Guggenheim Solar ETF (NYSEArca TAN) and Market Vectors Solar Energy ETF (NYSEArca: KWT) are down 60% year to date.
“We expect an industry rebound will not occur until mid-2012 at the earliest. Solar demand growth remains promising in the long term, but near-term growth rates are going to be very modest,” wrote Stephan Simko for Morningstar.
The solar industry fundamentals are the weakest they have been in years, while the overall stock market volatility is high. Riskier shares and sectors are vulnerable at times such as these, and as long as investors are risk-averse, there will not be a change, reports Simko on Morningstar. [Solar ETFs Pummeled in Third Quarter]
There is a glut of solar panels that exceeds demand. [Solar ETFs Wilt on First Solar CEO’s Departure]