By Sarfaraz A. Khan.
Solar stocks have been struggling over the last few months on fears that the weakness in oil and gas prices will wipe out the demand for solar energy. To exacerbate, Japan, one of the biggest markets for the solar industry, could witness significant reductions in PV installations this year as the country has tightened the rules on incentive payments.The Guggenheim Solar ETF (NYSEARCA:TAN) - which includes more than two dozen leading players of the global solar industry -- has fallen by 20% while the shares of the Silicon Valley-based SunPower Corporation (NASDAQ:SPWR) have plummeted by 31% over the last six months.
Earlier in December, Japan's Ministry of Economy, Trade, & Industry made revisions to the country's lucrative feed-in-tariff scheme which has played a key role in fueling the growth of the country's solar industry over the last two years. The new rules give more flexibility to utilities when it comes to accepting electricity from PV operators.