Beleaguered Solar Sector Plagued by More Price Drops (TAN)

The price of polysilicon, a key component in manufacturing of solar panels, is continuing to plunge as the industry is wrestling with an acute oversupply as production runs far ahead of demand. The decline in polysilicon prices have an impact on pricing for solar modules and systems, adding to the woes of the industry in what is already expected to be a challenging year, according to researchers at IHS.

Pricing fell mainly due to larger volumes of sales on the spot market compared to contract deals.

Related stocks, such as MEMC Electronic Materials Inc. (NASDAQ: WFR) and First Solar, Inc. (Nasdaq: FSLR), are taking a beating. WFR is down 40 percent so far this year, with losses accelerating in the past week. FSLR is down 52% year-to-date.

After having an excellent start to the year, solar sector stocks have been under pressure for about a month, and the Guggenheim Solar ETF (NYSE: TAN) has dropped 10 percent during this period.

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