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This article was written on April 1, but it's no joke that solar energy stocks got pummeled for the first quarter of the year.

From January 1 to March 31, here is the change in stock price for some over-the-counter and Pink Sheet solar energy companies:
  • -50% for BioSolar, Inc. (OTCBB: BSRC)
  • -76% for Clean Hydrogen Producers Ltd. (Pink Sheets: CHPO)
  • -69% for GiraSolar (Pink Sheets: GRSR)
  • -31% for QCells Ag Thalheim (Pink Sheets: QCLSF)
  • -52% for Solar Enertech Corp. (OTCBB: SOEN)
  • -67% for Solar Power, Inc. (OTCBB: SOPW)
  • -80% for Trendsetter Solar (Pink Sheets: TSSP)
  • -35% for WorldWater & Solar Technologies Corp (OTCBB: WWAT)
Yesterday, GiraSolar hit a record low of a nickel a share.

In general, it has been dark times for solar energy. Indices for solar energy fell significantly for the first quarter. For example:
General renewable energy indices also fell for the first quarter of the year:
Solar stocks did worse than the renewable energy sector as a whole. Also, at least in our sample here, the smaller stocks - the over-the-counter traded ones - have done worse than the solar energy indices.

The obvious question is why are solar stocks slumping? The faltering American economy is the primary driver of the dive of solar stocks and renewable energy stocks in general. Corporate and government policy is shifting towards a philosophy of short term survival, which does not favor investment in solar energy. Solar photovoltaic systems tend to be expensive, requiring many years to pay for themselves.

Another issue is the silicon supply problems in the solar industry. This is particularly striking in vertically integrated solar companies, such as Renewable Energy Corp. (REC.OL). REC indicated that cost overruns and delays in its polysilicon plant in the U.S. could trickle down to impact its other divisions. "The lower availability of polysilicon could possibly also affect production in REC Wafer and REC Solar towards the end of 2008," REC said. REC stock has fallen 49% since the start of the year.

The supply problems also crop up in the high cost of sales for many solar companies. For example, according to Open Energy's SEC filing from January 22, 2008, for the three months that ended November 30, 2007, the company had revenues of over $1 million, but cost of sales of over $3 million, for a gross loss of over $2 million.

Many solar stocks have rallied partially in recent days. The World Solar Energy Total Return Index (SOLEX) is up 22% since March 21. Are the dark days for solar energy over?