Though falling oil prices and concern about a market glut have been driving down the value of companies in the Bloomberg Global Large Solar Index, the connection from oil to solar “may be more emotional than based on fundamentals,” the financial news service reports.
“We have never liked the psychological correlation between solar stocks and oil, but it exists to some degree,” wrote analyst Josh Baribeau of Canaccord Genuity Inc. in an October 14 note to clients. Martin observes that “solar power doesn’t compete with oil as a source of electricity, except on small islands and in some crude exporting countries. Oil generates less than 1% of U.S. power supplies and 5% globally.”
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