Solar stocks and exchange traded funds (ETFs) plummeted after oil prices fell lower and investors worried about an oversupply of solar panels.

One analyst at Lehman says the sell-off could be because of a misinterpretation of statements made by a solar executive, reports Dirk Lammers for the Associated Press.

Oil fell to $103.26 today - its lowest point since April 1.

In a note to clients, SunPower Corp.’s (SPWR) CEO made comments about price declines that were inconsistent with estimates provided during the company’s second quarter earnings call. The Lehman analyst maintains a positive rating for the sector, but that continued volatility is expected until Spanish and U.S. market government incentives are resolved.

The analyst says 2009 is expected to be a year of transition for the sector and predicted that tight supply could continue.

Both solar ETFs took a big hit in trading today. Market Vectors Solar Energy (KWT) lost 11.2%, and all of its top 10 holdings declined, led by JA Solar Holdings Co., Ltd. (JASO), which lost 17%. Claymore/MAC Global Solar Energy (TAN) also saw all of its top 10 holdings fall, and the fund overall lost 11.9% today. JA Solar was the biggest decliner in TAN, as well. The company is 4% of both TAN and KWT.

KWT is down 27.4% since its April 23 inception, while TAN is down 25.4% since its April 15 inception.