Solar Stocks Rise On Prop. 87 Optimism

It’s the Proposition 87 wager: buy solar stocks, sell oil stocks, if you think that California voters will approve Proposition 87, a measure backed by Silicon Valley venture capitalist Vinod Khosla that would place a new tax on oil extracted in California and use the proceeds to support alternative energy.

Tim Luke, an analyst at Lehman Brothers, Tuesday morning suggested that shares of SunPower (SPWR) could get a short-term lift if the measure was approved, since it could result in improved incentives in California for the adoption of solar power. It’s hard to see the measure having a huge impact on oil stocks - though the measure specifically includes the hard-to-police clause that the new tax not be passed along to consumers in the form of higher gasoline costs. But it does seem likely that the solar stocks could get a boost from passage of the measure. (A week ago, the widely regarded Field Poll had the measure behind by about four percentage points.)

Not to play favorites, here are links FOR and AGAINST.

Solar stocks, as it happens, are mostly higher today:

• SunPower is up $1.01 at $33.75.
• Cypress Semiconductor (CY), which owns most of SunPower, is up 23 cents at $16.75.
• Suntech (STP) is up 23 cents at $23.55.
• MEMC (WFR), which makes silicon wafers for both solar and semiconductor customers, is up $1.32 at $36.67.

On the other hand, Chevron (CVX) is down 79 cents to $68.97. And Bakersfield-based Berry Petroleum (BRY) is down 45 cents at $30.70.

Comments

[kkin365:]

It is confusing to read this post, the after Prop 87 is said (based on what I have heard over TV; I am on the east coast) to have been defeated. omooc

2006 Nov 08 10:11 AM

[Greg Pinelli:]

With some due respect...the article is simple minded. The idea that alternative energy technologies would have profited from Prop 87 is absurd. Prop 87 would have been a fantastic boon to the inept and the proposal prolific. Every other possible worthwhile idea would have prospered in the free market or been killed...as is appropriate. Prop 87 WAS defeated....and we should all be grateful.

2006 Nov 08 08:56 PM