The Next Energy Sector Collapse — Coming SOON…
Here is a bearish article on utilities and XLU, the utilities ETF. There is some truth that solar installations have hurt traditional utilities, but I'm not sure that it is significant. First, some utilities have embraced solar themselves, and they can pay for the solar installations a lot easier than homeowners. One example is Sun Edison (SUNE).
A second point is that oil and natural gas are very cheap now. Utilities can actually make a lot of money under these circumstances, and this situation is not going away anytime soon. Some solar stocks like TAN, the solar ETF, have actually fallen more than XLU. This is due to the current glut of oil and natural gas. Even though solar is getting inexpensive, people are unlikely to invest in solar installations unless oil and natural gas greatly increase in price again.
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