First Solar, Inc. (FSLR), Solar Stocks Pop on Carbon Tax Talk

First Solar, Inc. (NASDAQ:FSLR) was leading a host of solar-related stocks higher on Tuesday amid reports that Washington is considering the possibility of two new taxes — including a carbon tax.

FSLR stock was up 3%, SunPower Corporation (NASDAQ:SPWR) gained more than 2%, Canadian Solar Inc. (NASDAQ:CSIQ) improved by more than 1% and even the wreckage of Sunedison Inc (OTCMKTS:SUNEQ) had ticked higher by 3%-plus as Washington tries to figure out how to raise revenues without widening the deficit even further.

The Washington Post on Tuesday reported that a carbon tax is being floated alongside a value-added tax, according to two unnamed sources, including an administration official. Per the report:

“The value-added tax, which is popular in many other countries, would serve as a kind of national sales tax, one that consumers would pay when they make purchases and that businesses would pay for supplies, services and raw materials. A carbon tax would target the emissions of carbon dioxide and other greenhouses gases in the burning of gasoline, coal and other fossil fuels.”

That was much-needed wind in the sails for FSLR shares, which are off nearly 60% in the past 12 months alone, including a 16% year-to-date dip.

The company has fallen upon hard times. In its most recent earnings report, First Solar reported a Q4 loss of $719.9 million — a record — thanks to a restructuring plan that included layoffs of 1,600 workers. The company also gave up on introducing a Series 5 panel design this year, and instead will look toward releasing a Series 6 in mid-2018.

For the full year, First Solar’s revenues fell to levels last seen in 2011, and gross margins dipped to decade-long lows of 23.9%.

FSLR even got the boot from Standard & Poor’s, which increased the market capitalization threshold for inclusion in the S&P 500. First Solar hit the exits alongside Frontier Communications Corp (NASDAQ:FTR) and Urban Outfitters, Inc. (NASDAQ:URBN) to make room for Advanced Micro Devices, Inc. (NASDAQ:AMD), Raymond James Financial, Inc. (NYSE:RJF) and Alexandria Real Estate Equities Inc (NYSE:ARE).

FSLR stock chart

Tuesday’s gains, while nice, don’t mean too much from a technical perspective. FSLR stock is still plumbing lows last seen in 2013.

And shares remain under all significant moving averages right now, though they’re still a little oversold, which could fuel a little more technical buying in the days ahead.

As of this writing, Robert Martin did not hold a position in any of the aforementioned securities.

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