Elon Musk’s SolarCity Corp (SCTY) Stock Price Plunges Over 30% On Oil Price Fears, Slower Growth Plan

Shares in solar panel installer SolarCity Corp. plunged by over 30 percent Wednesday in early morning trading.

The drop builds on losses from Tuesday that followed the California company’s quarterly earnings report. SolarCity, whose largest investor is Tesla Motors Inc. founder Elon Musk, forecast a bigger-than-expected loss for the first quarter as installations fell short of its target.

SolarCity stocks (NASDAQ:SCTY) fell to $18.36 before edging up to $19.61 by 10:37 a.m. EST. The S&P 500, by contrast, was up 0.8 percent in morning trading.

The San Mateo, California, company said it deployed 272 megawatts in rooftop solar projects in the fourth quarter, slightly below its target of 280 to 300 megawatts. CEO Lyndon Rive attributed the drop to delays on commercial-scale projects and halted operations in Nevada. SolarCity in December ceased new solar installations in the state and cut 550 jobs after Nevada utility regulators raised fees and reduced incentives for solar power customers.

Speaking on a Tuesday conference call, Rive said the company would add 180 megawatts in new solar projects in the January-March period, only 18 percent more than during the same period in 2015.

The setbacks in Nevada arrive as SolarCity is planning to trim installation growth overall in a bid to cut costs and become cash-flow positive. Rive announced the plan last fall, surprising investors who have backed a more aggressive growth strategy. Shares of the company tanked by as much as 24 percent on Oct. 30 to $29.06, the lowest levels in more than two years.

Slower growth plans are compounding investors’ fears that plunging oil prices will diminish demand for renewable energy. While solar companies don’t compete directly with oil — which accounts for about 1 percent of the total U.S. electricity supply — the tumble in crude prices since mid-2014 has weighed on energy stocks overall.

West Texas Intermediate crude, the U.S. oil benchmark, was up 0.82 percent to $28.17 by 10:49 a.m. EST.

S&P Global Market Intelligence maintained its “hold” recommendation on SolarCity shares Wednesday and widened its 2016 loss-per-share view to $9.54 from $8.15. Still, “We are encouraged by cost-per-watt reductions, stable pricing and see positive cash-flow year-end,” Angelo Zino, an S&P equity analyst, wrote in a research note.