SolarCity Corp (NASDAQ:SCTY) CEO, Lyndon Rive, has come out fighting maintaining that the market is getting it all long in terms of solar stock’s valuation. The CEO made the remarks during an interview on CNBC where he also maintained that oil prices swinging either way can never have an impact on the prices of electricity.
“In the U.S almost no oil is used to create electricity so even if oil went down to fifty, it will have almost zero effect in the cost of electricity but the opposite is true too. If oil went up to a hundred and fifty, it will have almost zero effect on the cost of electricity,” said Mr. Rive.
The decline in oil prices has resulted in most of the solar stocks also plummeting with SolarCity Corp (NASDAQ:SCTY) currently trading at a low of 25% on a year to date. Despite the dip, SolarCity continues to disrupt old ways of providing electricity to the end consumer being a leader in the offering of low-cost solar electricity.3
Investors continue to be concerned on the fact that SolarCity Corp (NASDAQ:SCTY)’s stock, as well as that of other solar companies, continue to follow the same pattern of oil trades in the market. SunPower Corporation (NASDAQ:SPWR) and Vivint Solar Inc. (NYSE:VSLR) solar are also down by 32% and 42% respectively in the market even though there is no direct relationship between them and oil.
Rive is of the opinion that smart investors should grasp the opportunity of the ongoing weaknesses in the solar sector and invest in the stock as fortunes are destined to improve going forward.
“The market doesn’t understand the dynamics; this is a great opportunity to understand the issue truly see if this is a big problem or not a problem and then capitalize on the opportunity. Oil has no effect or almost no effect on the cost of electricity in the U.S,” said Mr. Rive.
Solar stock have traditionally been expensive but with the ongoing dip smart investors may look to capitalize on it as costs for solar systems continue to come down much to the excitement of the mass market. There is optimism in the sector that costs may come down to a level where solar power will be cheaper than grid power.
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