Energy Conversion posts second straight loss, shrs dip

Mon Nov 9, 2009 1:17pm EST

* Q1 shr loss $0.28 vs EPS of $0.27 last yr

* Q1 sales more than halve, way below Wall St view

* Sees price declines, sequentially flat shipments in Q2

* Says prior FY rev outlook no longer applicable

* Shares down 4 pct

By Adveith Nair

BANGALORE, Nov 9 (Reuters) – Energy Conversion Devices Inc (ENER) reported its second straight quarterly loss, with sales coming in below estimates as demand for its solar products remained soft, and warned that prices would continue to fall.

On a conference call with analysts, the company said average selling prices, down 13 percent in the fourth quarter, would continue to decline in the December quarter.

“Our current estimate is we think high single digits to just around double digit decline would be appropriate,” a company executive said.

Like others in the solar industry, the Rochester Hills, Michigan-based company has been hurt by a dearth of financing and a global oversupply of solar panels that sent prices on solar power products tumbling.

ECD, which reported five consecutive profitable quarters before two back-to-back quarterly losses, makes lightweight, flexible solar laminates for rooftops and buildings that convert sunlight into electricity.

The company also indicated that visibility remained poor.

“At this time, our project business is uneven with large discreet orders where the shipments and timing of revenue recognition are difficult to precisely forecast. As a result, our prior full year revenue production is no longer applicable,” Chief Financial Officer Harry Zike said on the call.

Energy Conversion Devices To Install Solar Roofing System at East Los Angeles College

9:55 am EST, Monday November 9, 2009

ROCHESTER HILLS, Mich., Nov. 9 /PRNewswire-FirstCall/ — Energy Conversion Devices, Inc. (ECD) (ENER), a manufacturer of proprietary, thin-film amorphous silicon-based photovoltaic (PV) laminates, along with its wholly owned subsidiary Solar Integrated Technologies, announced today an agreement to install a 365kW building-integrated solar roofing system at East Los Angeles College (ELAC) as part of a contract with Chevron Energy Solutions, energy services provider for the ELAC project.

“This project provides us with a unique opportunity to help East Los Angeles College save money and prepare for a greener future,” said Mark Morelli, president and CEO of ECD. “Our recent acquisition of Solar Integrated Technologies more vertically integrates our company and gives us the capabilities we need to install this UNI-SOLAR building-integrated membrane roof for ELAC.”

In addition to installing a new, energy-efficient PV roofing system, the energy services contract bundles multiple energy efficiency improvements into a single package that includes upgrading the facilities’ lighting, insulation and HVAC systems.

Energy Conversion Devices Reports Financial Results for First Quarter of Fiscal Year 2010

8:00 am EST, Monday November 9, 2009

ROCHESTER HILLS, Mich., Nov. 9 /PRNewswire-FirstCall/ — Energy Conversion Devices, Inc. (ECD) (ENER), the leading global manufacturer of thin-film flexible solar laminate products for the building-integrated and commercial rooftop markets, today announced financial results for the first quarter of its fiscal year 2010.

Total consolidated revenues for the first quarter of fiscal 2010 were $42.9 million, compared to $95.8 million in the first quarter of fiscal 2009 and $51.4 million in the fourth quarter of fiscal 2009. Solar product and project sales for the quarter were $36.1 million, compared to $89.5 million in the same quarter last year and $46.0 million in the fourth quarter of fiscal 2009.

For the first quarter, the company reported a net loss of $11.8 million, or $0.28 per fully diluted share, compared to net income of $11.8 million, or $0.27 per fully diluted share, in the year-ago period. This compares to a net loss of $17.6 million, or $0.41 per fully diluted share, in the fourth quarter of fiscal 2009. Results for the first and fourth quarters of fiscal 2009 have been adjusted to reflect the company’s implementation of FASB ASC 470-20.

First quarter net results were affected by several items, which, when taken collectively, had a positive net impact of approximately $2.7 million or $0.06 per share. These items included the impact related to the acquisition and integration of Solar Integrated Technologies (SIT) and non-SIT related items including the sale of previously written-down inventory and tax refunds for prior research and development expenditures.

Mark Morelli, ECD’s President and Chief Executive Officer, said “In the first quarter, new construction and reroofing projects continued to be slow, negatively impacting sales through our traditional building-materials channel. We are the leaders in this building-integrated photovoltaic (BIPV) market, and remain confident that this channel will recover and our new and reroofing business will improve longer term.”

“To expand our near-term addressable market beyond our traditional BIPV focus, we are developing product solutions for rooftop retrofit applications including our recently launched tilt solution. This product leverages the light-weight attributes of our core flexible laminates as well as our superior energy yield resulting in leading levelized cost of energy (LCOE) performance and attractive returns to customers worldwide,” said Morelli. “We are also working with project developers to pursue large-scale projects in our key markets.”

Energy Conversion Devices and MP2 Capital Announce Plans to Develop Rooftop Solar Projects in Ontario, Canada

6:00 am EST, Monday November 9, 2009

ROCHESTER HILLS, Mich., and SAN FRANCISCO, Nov. 9 /PRNewswire-FirstCall/ — Energy Conversion Devices, Inc. (ECD) (ENER) and MP2 Capital, LLC today announced plans to collaborate on the development of a portfolio of rooftop solar installations in Ontario, Canada.

ECD and MP2 Capital will partner with Rumble Energy, an Ontario-based renewable energy developer, to install a series of rooftop solar projects throughout Ontario, Canada under the province’s new feed-in-tariff program. By also partnering with other Ontario-based suppliers and contractors, the projects will meet the local content requirements set forth by the Ontario Power Authority. The companies expect to complete construction of approximately 10MW of projects by October 2010. ECD, through its wholly owned subsidiary, United Solar Ovonic, will provide UNI-SOLAR® brand photovoltaic laminates for the projects. MP2 Capital will lead the financing and development efforts for the projects.

Mark Morelli, ECD’s president and CEO, said, “We look forward to partnering with MP2 Capital on this important project in Ontario. This is a good example of our demand-creation strategy, where we partner in the development of solar projects that have attractive rates of return for project investors. The Ontario Power Authority has demonstrated an impressive commitment to the promotion of renewable energy development and ECD intends to be a major player in the province in the years to come.”

Mark Lerdal, MP2 Capital’s CEO, stated, “We are pleased to partner with ECD on this exciting development effort. The feed-in-tariff structure in Ontario promotes this distributed generation rooftop model, and UNI-SOLAR laminates are ideal for solar rooftop installations.”

About MP2 Capital, LLC

MP2 Capital LLC develops, finances and invests in renewable energy projects worldwide. The firm was founded in 2006 and has a track record of successful development and operation of multiple solar projects throughout North America. The firm maintains a strong partnership culture that continually builds upon its deep and broad relationships with communities, landowners, local developers, utilities, energy providers, contractors, manufacturers, lenders and investors. The firm is headquartered in San Francisco, California. Learn more at www.MP2capital.com.

Energy Conversion Devices and CertainTeed Install New Residential Rooftop Solar Product Atop Michigan Governor’s Residence

3:55 pm EDT, Wednesday October 28, 2009

LANSING, Mich., Oct. 28 /PRNewswire-FirstCall/ — Energy Conversion Devices, Inc. (ECD) (ENER), the leading global manufacturer of UNI-SOLAR® thin-film flexible solar laminates, and CertainTeed Corporation, a leading North American building products manufacturer, today announced the installation of EnerGen(TM), a breakthrough solar roof system, on the official residence of Michigan Governor Jennifer M. Granholm.

EnerGen is the first product developed through a joint venture announced between the two companies in October 2008, and is slated for official launch to the roofing industry in 2010. EnerGen combines Uni-Solar’s industry-leading expertise in photovoltaics (PV) with CertainTeed’s century-long leadership in residential roofing to create a solar roof system that seamlessly integrates the solar with roofing shingles. To celebrate this achievement, the two companies donated a 3.2 kW EnerGen system for Governor Granholm’s official residence in Lansing, Michigan.

“We are pleased that our collaboration with CertainTeed has resulted in the development of an industry first,” said Mark Morelli, ECD’s President and CEO. “In recognition of Governor Granholm’s tireless efforts to reconstruct Michigan’s economy around clean, renewable energy, it’s entirely appropriate that her home receives one of the first EnerGen residential rooftop solar power systems. She can be proud to know that the solar cells powering her rooftop system were developed and manufactured in Michigan.”

“Our goal since partnering with United Solar was to develop lightweight, aesthetically pleasing integrated solar roofing products that are affordable and available to more people,” said Guillaume Texier, President of CertainTeed Roofing. “EnerGen is a tremendous step in that direction and CertainTeed looks forward to developing a portfolio of PV products for both residential and commercial applications. As a proud Michigan employer, CertainTeed is honored to support the Governor’s energy efforts with this launch.”

The official Michigan Governor’s Residence is a single-story home on four acres in the Moores River Drive neighborhood of Lansing. Designed by American Architect Wallace Frost, the original home was built in 1957 and donated to the state in 1969. Since then, several additions and renovations have been made to expand and modernize the home using products and materials made in Michigan. Mechanical Energy Systems of Michigan assisted with the installation of the system on the Governor’s residence. The home also features CertainTeed’s Grand Manor® Luxury Shingles, a product that also adorns the historic Henry Ford home and Eastern Market in Detroit.

“Dan and I are grateful and excited that the governor’s official residence in Lansing can now generate some of its own electricity using solar technology developed right here in Michigan,” Granholm said. “These new EnerGen panels show how Michigan companies like United Solar are leading the way in alternative energy development and are helping to transform our state into a global center for green manufacturing. We hope that homes throughout Michigan and the world will take advantage of clean, renewable energy sources to help improve our environment and our economy.”

About CertainTeed

Through the responsible development of innovative and sustainable building products, CertainTeed has helped shape the building products industry for more than 100 years. Founded in 1904 as General Roofing Manufacturing Company, the firm’s slogan “Quality Made Certain, Satisfaction Guaranteed,” quickly inspired the name CertainTeed. Today, CertainTeed® is North America’s leading brand of exterior and interior building products, including roofing, siding, windows, fence, decking, railing, trim, foundations, pipe, insulation, gypsum, ceilings and access covers.

Headquartered in Valley Forge, Penn., CertainTeed and its affiliates have more than 6,000 employees and more than 65 manufacturing facilities throughout the United States and Canada. In 2009, CertainTeed was named ENERGY STAR Partner of the Year by the U.S. Environmental Protection Agency, a national award that recognizes environmentally responsible corporations. The group had total sales of more than $3 billion in 2008. www.certainteed.com

Energy Conversion Devices and United Solar Introduce the UNI-SOLAR PowerTilt(TM) Solar Rooftop System

New Tilted Rack-Mount Solar Solution Offers Ease of Installation, Lower BOS Costs And Lowers LCOE for the Building Applied Photovoltaic (BAPV) market

2:03 pm EDT, Tuesday October 27, 2009

ROCHESTER HILLS, Mich., Oct. 27 /PRNewswire-FirstCall/ — Energy Conversion Devices, Inc. (ECD) (ENER), the leading global manufacturer of thin-film flexible solar laminate products for the building integrated and commercial rooftop markets, today introduced its new UNI-SOLAR PowerTilt(TM) Solar Roof system – the lightest rack-mounted solar system available today. UNI-SOLAR PowerTilt solar rooftop systems are manufactured for the Building Applied Photovoltaic (BAPV) market.

The new UNI-SOLAR PowerTilt product will be available in 136 or 144 watts per panel, and offers unique features and benefits to the rooftop solar buyer.

Lightweight and Durable

UNI-SOLAR PowerTilt is ideal for low-load bearing roofs, can be installed without costly structural roof reinforcements, is glass-free and encapsulated in UV-stabilized, weather-resistant polymers. It holds up against high-winds, hail, and impacts and comes with a 25-year limited power warranty.

Easy to Install with No Roof Penetrations

At less than two pounds per square foot, it is easy to handle. Attachment options facilitate installation to a variety of roofing materials. The UNI-SOLAR PowerTilt assembly is also easy to remove for re-roofing. The integrated mounting frame of the UNI-SOLAR PowerTilt installs without roofing penetrations.

Lower Levelized Cost of Electricity.

Best of all, UNI-SOLAR PowerTilt’s lower balance of systems costs and optimized energy output result in lower LCOE.

Mark Morelli, President and CEO for Energy Conversion Devices said, “This new product is another in a long line of innovations from United Solar. UNI-SOLAR PowerTilt offers excellent real-world power output in a lightweight product that is suited for application on any existing rooftop. We have proven ability to manufacture such innovative products in scale to meet the demands of the marketplace, and we look forward to continuing to introduce new products and setting the standard for lightweight solar rooftop solutions.”

The UNI-SOLAR PowerTilt rooftop solar system is the newest member of United Solar’s PowerLine of products. The UNI-SOLAR PowerTilt is on display at 2009 Solar Power International at the Company’s booth 1111, and will be available for purchase in January 2010.

Energy Conversion Devices and Austin Energy to Build Austin’s Largest Solar Rooftop on City Building

UNI-SOLAR Installation to Save 167,605 Kilowatt Hours of Electricity Annually

8:00 am EDT, Tuesday October 27, 2009

ROCHESTER HILLS, Mich., Oct. 27 /PRNewswire-FirstCall/ — Energy Conversion Devices, Inc. (ECD) (ENER), a manufacturer of proprietary, thin-film amorphous silicon-based photovoltaic (PV) laminates, announced today that its UNI-SOLAR® laminates will be used to power a 136-kW solar photovoltaic rooftop system at the Austin Water Utility’s Glen Bell Service Center in Austin, Texas.

On September 24, the Austin City Council granted approval for Austin Energy – the nation’s 9th largest community-owned electric utility – to build the city’s largest solar rooftop installation using lightweight and flexible UNI-SOLAR laminates. Beginning November 1, approximately 1,000 laminates covering 23,250 square feet of roof space will be installed on the Service Center.

“The Glen Bell Service Center recently replaced its worn roof with a new membrane roof. Our peel-and-stick UNI-SOLAR laminates are the ideal choice for a membrane rooftop solar solution since they can be quickly installed and do not make any holes in the brand new roof,” said Mark Morelli, president and CEO of Energy Conversion Devices.

When complete, the 136-kW system will have a peak electrical output of 105 kW, with a capacity factor of about 18%. It is expected to reduce the Service Center’s peak demand by about 24 kW and save 167,605 kWh annually, or enough power to provide electricity to 17 average-sized homes in Austin for an entire year.

About Austin Energy

Austin Energy is the nation’s 9th largest community-owned electric utility, serving around 400,000 customers and a population of more than 900,000. Austin Energy powers the capital city of Texas through a diverse generation mix. Its portfolio provides nuclear, coal, natural gas, and renewable energy sources and creates over 3,000 megawatts (MWs) of total generation.

Solar Stocks Ready For A Big Move

Posted: Oct 26, 2009 16:19 PM by Joey Fundora

The solar stocks continue to be one of the more volatile groups in the markets. Traders often fear high levels of volatility, but if these are properly planned for, volatile stocks can offer outstanding trading opportunities. The solar stocks have been in a large range over the past year, and many of these stocks actually set their lows in November rather than March. This group has often been cited by the current administration as a focal point in helping to reduce the U.S. dependence on oil-rich countries, and while it has threatened to fall apart several times, it has continually found a floor.

This group is once again under pressure as a poor earnings report from SunPower Corporation (SPWRA, SPWRB) kicked off this earnings season, as the markets reacted poorly to the company’s guidance number. While this stock individually came under pressure, as a group there wasn’t major technical damage done. In looking at the Claymore/MAV Global Solar Energy Index ETF (TAN), which can be used as a proxy for the sector, you can see that TAN held up last week, despite the weak report by SPWRA. In looking at the chart, there is an interesting pattern developing. Overall, TAN remains in a trading range, but it was able to clear a descending wedge in September, and is currently trading in a small symmetrical triangle. Both of these patterns are simply consolidation patterns, but with TAN clearing the first to the upside, it may hint at a break to the upside from the second pattern as well. The descending trendline touching the last two price highs should be watched as a level of importance.

Source: StockCharts.com

The largest component in TAN is First Solar, Inc. (FSLR). With FSLR reporting on Wednesday, it could be the catalyst for a move in either direction for the group. The company’s last earnings report was met with steep selling, as FSLR pulled back from $176.05 to $112.09 in a few weeks’ time. FSLR did stabilize, and rallied back to a declining trendline, marking the tops of prior rally attempts. It recently cleared this trendline, and it continues to trade in a tighter consolidation leading into the earnings report. More than likely, FSLR will have a large move this week, but with earnings coming out, which direction it’s headed is anyone’s guess. However, this stock will likely impact the entire sector, so it is worth watching to help gauge the direction for the next quarter.

Source: StockCharts.com

Energy Conversion Devices, Inc. (ENER) is another solar that has been showing weakness for a few months, but recently cleared a declining trendline that halted recent rally attempts. It just cleared this area, and has been experiencing an uptick in volume. Earnings are not due until November, so this is a stock that could benefit from a positive FSLR report. A move above $13.62 could signal a test of $14.21 and possibly a test of the 200-day moving average near $16.

Source: StockCharts.com

Another stock worth watching is Yingli Green Energy (YGE). This stock has shown relative strength compared to its peers, and has been in a consolidation pattern for a few months. It’s currently looking a little weak, and is resting on its 50-day moving average, but if it can get back over $13.85 it could be ready for a test of the June high near $16.35.

Source: StockCharts.com

Bottom Line
The solar stocks could really go in either direction at this point, but they are worth watching with FSLR reporting this week. They often set the trend for this group, and there could be some great trading opportunities setting up. The levels noted in the charts above are starting points for watching the action objectively. Regardless of the headline news or numbers, the important thing to watch is what the stock price does moving forward. If any of these stocks starts to climb above key levels, there is a good chance they can experience a sharp rally. If they start to lose these levels, the opposite would hold true. With volatile groups like these, it’s worth watching regardless of which direction the move goes.

Solar Stocks Slide On Worries Over German Subsidies

By Eric Savitz
barrons.com

Uh-oh.

For years, Germany has been by the far the world’s largest solar market, thanks to an extremely lucrative feed-in-tariff program. But the cost of the program has become a political issue in Germany recently. And now a spokesman for the ruling Christian Democrats has warned that the government intends to reduce incentives for generating solar power as early as next year.

According to Bloomberg, Joachim Pfeiffer, the “energy spokesman” for the party, noted that there has been a massive increase in solar capacity in the country, at a time when solar-power panel prices have plummeted. “We will review the overall renewable energy law in 2011 but will undertake reductions in solar subsidies taking effect as soon as next year,” Pfeiffer said. Solar panel owners are paid as much as 43 Euro cents per kilowatt hour of power generated; Bloomberg says, while consumers in Germany generally pay about 20 euro cents per KwH.

In a research note this morning, Citigroup analyst Timothy Arcuri notes that the government’s stance is “decidedly more negative” than original expectations.

Arcuri says the news could be a temporary positive, pulling some solar projects forward to avoid missing the window on the current FIT structure. But longer term, it clearly is not good news.

Arcuri says that of the companies he covers, First Solar (FSLR) has the most exposure, with about 70% of sales in Germany; SunPower (SPWRA, SPWRB) has about 20% exposure. Arcuri writes that he continues to expect 2010 to be a year of “profitless prosperity” for the solar sector, “in which profits contracts even in a year of more significant demand growth.”

Among the solar stocks:

* First Solar is down $3.40, or 2.1%, to $156.60.
* SunPower is down 27 cents, or 0.8%, to $32.55.
* SunTech (STP) is down 63 cents, or 4%, to $15.18.
* Yingli Green Energy (YGE) is down 31 cents, or 2.3%, to $13.29.
* Energy Conversion Devices (ENER) is down 73 cents, or 5.8%, to $11.79.
* Canadian Solar (CSIQ) is down 48 cents, or 2.6%, to $17.57.
* MEMC Electronic Materials (WFR) is down 75 cents, or 4.6%, to $15.69.
* Evergreen Solar (ESLR) is down a penny at $1.81.

Energy Conversion Devices Spikes On Takeover Rumors

By Eric Savitz
barrons.com

Energy Conversion Devices (ENER) shares are sharply higher amid takeover speculation. I’d note that takeover rumors on the solar products company crop up with some regularity; the last round of chatter, about a month ago, involved theoretical interest in the company from Applied Materials (AMAT).

I didn’t buy the AMAT rumors, and I wouldn’t hold out a lot of hope that there’s anything real this time, either.

ENER today is up $1.93, or 17.7%, to $12.82.

Energy Conversion Devices Announces 4.8-Megawatt Solar Project in Spain

ECD Selected by Recurrent Energy for Eight ProLogis Solar Rooftop Installations

Monday October 5, 2009, 8:30 am EDT

ROCHESTER HILLS, Mich., Oct. 5, /PRNewswire-FirstCall/ — Energy Conversion Devices, Inc. (ECD) (ENER), the leading global manufacturer of thin-film flexible solar laminate products for the building integrated and commercial rooftop markets, today announced it has been selected by Recurrent Energy to deliver 4.8MWp of solar generating systems for eight separate building rooftops at ProLogis Park Sant Boi in Barcelona and ProLogis Park Alcala in Madrid, Spain. ECD will be supplying its UNI-SOLAR photovoltaic (PV) laminates and providing development resources through its Solar Integrated subsidiary.

The solar power systems will be owned by Recurrent Energy, a distributed power company and a leading provider of solar energy, and installed on rooftops leased by Recurrent Energy from ProLogis, a leading global provider of distribution facilities. Construction on the project is expected to start in October 2009.

ProLogis, a leading global provider of distribution facilities, currently has UNI-SOLAR systems installed on facilities in the U.S., Spain and France. “We are very pleased to continue our relationship with UNI-Solar and SIT through this project,” said Drew Torbin, director of global renewable energy for ProLogis. “We look forward to working with the company closely over the next several months as we bring this project on line.”

“This new agreement is the first example of the benefits of combining our leading UNI-SOLAR PV laminate product with the rooftop solar expertise of Solar Integrated. This project also demonstrates how we will work closely with Recurrent Energy and our key channel partners–in this case Soprema and its dedicated subsidiary Solardis–to provide innovative solutions that meet the needs of our customers and their roofs,” said Mark Morelli, president and chief executive officer for ECD.

For this project, Solar Integrated will engineer, procure, and construct the solar PV systems totaling 4.8 megawatts for Recurrent Energy. The PV systems will consist of UNI-SOLAR laminates combined with the SOPRASOLAR complex – a bituminous waterproofing system, and will be applied directly on the roofs. Installation will be done by Soprema’s local installer Master Renovables.

U.S. solar industry to challenge tariff ruling

Thu Oct 1, 2009 7:10pm EDT

* U.S. importers could face $70 million in tariffs, fines

* Industry hopes to persuade US Customs to reverse ruling

* Some see move counterproductive to global climate goals

By Doug Palmer

WASHINGTON, Oct 1 (Reuters) – The U.S. solar energy industry hopes to persuade Customs officials to reverse a decision to impose a 2.5 percent tariff on solar panel imports after more than two decades of duty-free trade in the product, an industry official said on Thursday.

“We’re taking it very seriously and we will be responding. … The industry is in the process of preparing a challenge,” said Rhone Resch, president of the Solar Energy Industries Association, whose members include both U.S. and foreign solar energy companies.

In the worst case scenario, U.S. importers of solar panels could face some $70 million in tariffs and penalties for product already imported this year.

The tariff comes at a time when concern about global climate change has prompted the United States and the European Union to push for deal with other leading developed countries and China to eliminate duties on environmental goods.

As the New York Times reported on Wednesday, the U.S. Custom service ruled in January a panel made by Trina Solar (TSL) of China was a generator because it contains a diode that allows electric current to pass around shaded areas of the panel.

That ruling was a surprise because “all solar panels contain bypass diodes and have forever. It’s a safety issue not to have them,” one industry official said.

Although the ruling only applies to the Trina panel, it has implications for other manufacturers, he said.

Energy Conversion Devices Adopts Tax Benefits Preservation Plan

Thursday October 1, 2009, 8:00 am EDT

ROCHESTER HILLS, Mich., Oct. 1 /PRNewswire-FirstCall/ — Energy Conversion Devices, Inc. (ECD) (ENER), the leading global manufacturer of thin-film flexible solar laminate products for the building integrated and commercial rooftop markets, today announced that its Board of Directors has adopted a tax benefits preservation plan to preserve ECD’s ability to fully use certain tax assets, including the company’s substantial net operating loss carryforwards. The plan is similar to tax benefit preservation plans adopted by many other public companies with significant tax attributes.

“Our tax assets, and particularly our net operating loss carryforwards, are important and valuable assets of our company, assets that we believe we should make every effort to protect. This tax benefits preservation plan protects the interests of our stockholders and preserves these substantial tax benefits for our company,” said Mark Morelli, ECD’s President and Chief Executive Officer.

ECD’s use of certain tax assets could be substantially limited if the company experiences an “ownership change,” as defined by Section 382 of the Internal Revenue Code. In general, an ownership change would occur if there were a cumulative change in ECD’s ownership by stockholders who beneficially own (or who are deemed under Section 382 to beneficially own) five percent or more of ECD’s outstanding common stock that exceeds 50 percentage points over a rolling three-year period.

The tax benefits preservation plan is designed to reduce the likelihood that ECD experiences such an ownership change by discouraging any person or group from becoming a 5-percent stockholder and dissuading existing 5-percent stockholders from acquiring additional shares of ECD’s common stock without prior approval of ECD’s Board of Directors. ECD’s Board of Directors has the discretion to exempt any acquisition of common stock from the provisions of the tax benefits preservation plan. The plan may be terminated by the Board at any time prior to the share purchase rights being triggered.

As part of the tax benefits preservation plan, on September 30, 2009, ECD’s Board of Directors declared a dividend of one common stock purchase right (a “Right”) for each outstanding share of common stock held of record as of the close of business on October 15, 2009. Shares of ECD’s common stock issued after that date also will receive Rights.

The Rights will be triggered if any person or group (subject to certain exceptions specified in the tax benefits preservation plan) acquires 4.9% or more of the outstanding shares of ECD’s common stock, thereby becoming an “Acquiring Person” for purposes of the tax benefits preservation plan. If triggered, each Right entitles the holder (other than the Acquiring Person or any transferee of shares of ECD’s stock held by the Acquiring Person) to purchase shares of common stock at a 50 percent discount to the then market price of ECD’s common stock, and the Rights owned by the Acquiring Person (or any transferee of the Acquiring Person) become void. Alternatively, if the Rights are triggered, ECD’s Board of Directors may decide to exchange all or part of the exercised Rights (other than those held by the Acquiring Person or any transferee of the Acquiring Person) for shares of common stock.

Unlike a traditional shareholder rights plan that typically endures for ten years, ECD’s tax benefits preservation plan will expire prior to the end of its ten-year term if the Board of Directors determines that the tax benefits preservation plan is no longer needed to preserve ECD’s ability to fully use its tax benefits due to the repeal of Section 382 of the Internal Revenue Code, or that ECD cannot carry forward any more of its tax benefits.

Details of the tax benefits preservation plan will be filed with the Securities and Exchange Commission and will be accessible via the EDGAR database on the SEC’s website at www.sec.gov. In addition, ECD’s stockholders of record as of October 15, 2009 may request a detailed summary of the plan from ECD.

Watch Out: Solar Stocks Might Sink

By James Altucher

As a financial adviser you have one goal: Don’t lose clients’ money. So even more important than finding stocks that could double or triple over the next year, you want to steer clear of stocks that could collapse.

It’s ugly, it’s painful, and nobody wants to call a client and point out an investment sank 90%.

Over the next two articles I’ll be analyzing a few stocks that fit this category. This is purely my view, of course, and I’d welcome anyone with differing views to use the comments section. (As I say in the comments section, I am not shorting these stocks.)

In general I don’t like the solar industry as an investment opportunity, which includes First Solar (FSLR), Energy Conversion Devices (ENER), JA Solar (JASO), LDK Solar Co. (LDK), Suntech Power (STP), Solarfun Power (SOLF), Yingli Green Energy (YGE), and Rene Sola (SOL).

First Solar, for instance, has been a glam stock for day traders for the past few years as the solar industry had almost as much hype behind it as the dot-com industry back in the heyday.

Let’s look at the macro picture and then the micro picture and you’ll see why this stock could go down 90%.

Macro picture:

Solar power is more expensive than other forms of power: coal, natural gas, nuclear, even wind, so the primary customer for all of the solar companies are the countries where solar power is subsidized with no cap on how high the subsidy could go.

In other words: Germany, which is the only such country. Spain tried it, but it was too expensive, so they began to cap the subsidy and as a result the solar industry is now one-fifth the size in Spain that it was when the subsidy was in place.

In fact, approximately 60% of First Solar’s revenue comes from sales to Germany.

Ascent Solar in supply deal with TurtleEnergy

Wed Sep 23, 2009 12:26pm EDT

* Signs supply deal with TurtleEnergy

* To supply 67 MW of photovoltaic modules over 5 yrs

* Shares rise as much as 23 percent

By Adveith Nair

BANGALORE, Sept 23 (Reuters) – Ascent Solar Technologies Inc (ASTI) said it signed a contract to supply up to 67 megawatt of photovoltaic modules to TurtleEnergy LLC over a five-year period, sending its shares up as much as 23 percent.

Raymond James analyst Pavel Molchanov said the contract was “extremely large” for a company of Ascent Solar’s scale.

“It is their largest commercial sale ever by a huge margin. We are clearly talking about at least $150 million over the life of the contract. It is a very large order for a company that is still in the development stage.”

This is Ascent Solar’s second supply agreement in as many days. On Tuesday, the company, which develops thin-film solar modules that convert sunlight into electricity, signed a direct supply agreement for its “premier” modules.

Jefferies & Co analyst Paul Clegg said Wednesday’s deal was “very important” for Ascent as it was the company’s first building integrated supply agreement.

Building integrated photovoltaics, which companies like Ascent and Energy Conversion Devices Inc (ENER) make, can be built into the structure of a building.

“The deal that they announced yesterday was really small, only about a million dollars. This one’s really different, a very meaningful deal for them,” Clegg said.

The analyst said the initial value of the contract could be in the range of $70 million to $100 million, adding that the contract’s revenue contribution for 2010 could account for one-third or more of his $36 million revenue estimate for the year.

The company did not disclose financial terms of the transaction.

Ascent Solar is scheduled to begin shipments to Linden, New Jersey-based photovoltaic systems integrator TurtleEnergy from its Thornton, Colorado, manufacturing plant early next year.

Raymond James’ Molchanov said the contract would not bring in immediate revenue, since the company was not yet ready to produce in commercial quantities.

“However, starting in the middle of 2010, once production capacity ramps up, there is going to be very visible revenue generation from this contract,” he said.

Shares of Ascent Solar rose as much as 23 percent to a high of $8.58, before paring some gains to trade up about 18 percent at $8.25 Wednesday on the Nasdaq.

The stock was among the top percentage gainers Wednesday on Nasdaq. About 800,000 shares changed hands, six times the company’s 10-day moving average.

ENER Again Up On Rumors; Pulls Out Of Conference

By Eric Savitz
barrons.com

Energy Conversion Devices (ENER), which rallied dramatically earlier this week on rumors that the company might get a bid from Applied Materials (AMAT), is on the rise again today.

The new reason, according to Briefing.com, is that the company has pulled out of a scheduled September 15 appearance at the ThinkEquity Growth conference. Briefing said the company says it canceled because CFO Harry Zike is too busy integrating an acquisition. Of course, you know what the rumormongers are thinking: companies that cancel conference appearances are up to something…something that might make the stock rise.

ENER today is up 66 cents, or 5.3%, to $13.08.

Solar crisis set to hit in 2010

50% of manufacturers may not survive, says The Information Network

Michael McManus, DIGITIMES, Taipei [Friday 4 September 2009]

The solar industry is at a critical stage and 50% of existing solar manufacturers may not survive 2010, according to The Information Network.

The market research firm recently noted massive inventory buildup and huge overcapacity were having a serious impact on the solar panel industry and manufacturers, and Dr. Robert Castellano, president of The Information Network has now pointed out that inventory is averaging 122 days in 2009 versus 71 days in 2008. Capacity utilization dropped to 27.9% in 2009 from 48.0% in 2008.

A key reason is increased supply from China, which added an additional 1GW of capacity. The price per watt has now dropped to US$1.80 for polysilicon-based products, which is lower than the US$1.85 level The Information Network previously thought the industry would see at the end of 2009. By way of comparison, the average selling price in the third quarter of 2008 was US$4.05 per watt.

The Information Network doesn’t expect other industry players to back down from increased competition from China. Other makers are expected to increase their capacities despite the low utilization rates in order to reach economies of scale and better compete against the Chinese. The market research firm expects the industry to see a 25.7% capacity utilization rate and 133 days inventory in 2010.

Average selling prices could drop below US$1 per watt in 2010 and US$0.50 in 2011. As many as 50% of the more than 200 solar manufacturers, mired in red ink with current selling prices above US$2.00 per watt, may not survive, The Information Network stated.

Solar panel manufacturers that have reported loses just in the past few weeks include Energy Conversion Devices (ENER), JA Solar (JASO), LDK Solar (LDK), Q-Cells, ReneSola (SOL), Solar Power (SOPW), and Yingli Green Energy Holding (YGE).

The Information Network: Planned global solar capacity increases, 2008-2010
Item	2008	2009	2010
Solar consumption (MW)	5,625	4,894	6,215
Solar capacity (MW)	11,722	17,551	24,212
Utilization	48.0%	27.9%	25.7%
Inventory days	71	122	133

Source: The Information Network, compiled by Digitimes, September 2009

Energy Conversion Devices downgraded to ‘Neutral’ on depressed shipments, dismal outlook

Friday August 28, 2009, 9:21 am EDT

NEW YORK (AP) — Depressed shipments, pricing pressure and a bleak near-term outlook for Energy Conversion Devices (ENER) prompted an analyst to downgrade the solar panel product maker Friday.

Cowen & Co. analyst Robert Stone said the company’s near-term shipments are even more depressed than expected. Making matters worse, continued pricing pressure, higher expenses and restructuring charges will likely yield losses until the fourth quarter of 2010, Stone predicted.

Even the company’s recent acquisition of Solar Integrated Technologies Inc. won’t help much right away, Stone said, as the deal adds systems expertise but little revenue in the near term. The company expects to recognize transaction and restructuring charges of about $10 million in 2010.

Rochester Hills, Mich.-based Energy Conversion Devices, like its solar industry peers, has been hurt by industry-wide price cuts for solar panels, driven by an oversupply of product, scaled-back demand and the falling price of polysilicon, a key raw ingredient.

Stone downgraded the stock to “Neutral” from “Outperform.”

Solar stocks mixed on earnings news

Solar stocks mixed as more solar companies post results, analysts warn of near-term challenges

Thursday August 27, 2009, 4:07 pm EDT

NEW YORK (AP) — Solar stocks were mixed on Thursday as two solar companies reported quarterly results and analysts raised concerns about near-term challenges for solar companies.

Solar panel product maker Energy Conversion Devices Inc. (ENER) posted a fiscal fourth-quarter loss, driven by hefty one-time charges and a sharp drop in demand for solar products as commercial construction declined, building owners deferred reroofing projects and project financing constraints continued.

China Sunergy Co. Ltd. (CSUN) said its second-quarter profit fell 43 percent but stronger shipments pushed results beyond analyst expectations.

Solar companies have been pummeled by industry-wide price cuts for solar panels, driven by an oversupply of product, scaled-back demand and the falling price of polysilicon, a key raw ingredient.

Credit Suisse analyst Satya Kumar cut his price target for Suntech Power Holdings Co. Ltd. (STP) to $12.50 from $16.50, citing the solar power company’s sharp second-quarter profit drop. The company also estimated a 15 percent to 20 percent decline in average selling price in the third quarter.

Kumar said he prefers shares of Trina Solar Ltd. (TSL) over Suntech, given Trina’s stronger growth in shipments and lower polysilicon to panel cost structure. Kumar rates Suntech “Neutral.”

FBR Capital Markets analyst Mehdi Hosseini said that even First Solar (FSLR), the nation’s largest solar panel maker and industry leader, faces a number of challenges in the near-term, namely, the delayed construction of the Sempra (SRE) 48-MW project, uncertainties around the timing of financing for the Blythe and Tristate projects and the recent departure of the company’s executive vice president of global marketing and business development. The company also needs to find a replacement for Mike Ahearn, the company’s current CEO who announced earlier this year he is stepping down.

“Recent trends/checks support our thesis that…downside risks have yet to be fully dialed into the stock,” Hosseini said. “We caution investors against unrealistic expectations associated with First Solar over the past year.”

Hosseini rates the company “Underperform” with a price target of $110. Shares of First Solar fell $1.96, or 1.6 percent, to $124.76.

Energy Conversion Devices Reports Revenues of $316 Million and Earnings Per Share of $0.29 for Fiscal Year 2009

Solar Integrated Merger Opens New Markets, Adds Capabilities to Reduce Total Installed Costs; Company Maintains Strong Financial Position

Thursday August 27, 2009, 8:00 am EDT

ROCHESTER HILLS, Mich., Aug. 27 /PRNewswire-FirstCall/ — Energy Conversion Devices, Inc. (ECD) (ENER), the leading global manufacturer of thin-film flexible solar laminate products for the building integrated and commercial rooftop markets, today announced financial results for its fourth quarter and fiscal year ended June 30, 2009.

Total consolidated revenues for the quarter were $51.4 million compared to $82.4 million in the fourth quarter of fiscal 2008 and $66.0 million in the third quarter of fiscal 2009. Solar product sales for the quarter were $46.0 million compared to $77.0 million in the same quarter last year and $59.7 million in the third quarter of fiscal 2009.

For the fourth quarter, the company reported a loss of $15.8 million or a loss of $0.37 per fully diluted share compared to a net income of $9.9 million or $0.24 per fully diluted share in the year-ago period. This compares to net income of $1.3 million or $0.03 per fully diluted share in the third quarter of fiscal 2009.

For the fiscal year ended June 30, 2009, total consolidated revenues were $316.3 million compared to $255.9 million in the prior year. Solar product sales were $292.4 million for fiscal 2009 compared to $231.5 million for the prior year. Net income for fiscal 2009 was $12.5 million or $0.29 per fully diluted share versus net income of $3.9 million or $0.09 per fully diluted share in the year-ago period. Net operating cash flow for fiscal 2009 was $11.1 million versus $28.5 million during fiscal 2008.

Mark Morelli, ECD’s President and Chief Executive Officer, said, “Demand for solar products in our target markets weakened further from the third quarter into the fourth quarter as commercial construction declined, building owners deferred reroofing projects, and project financing constraints continued. In response, we took deliberate steps to reduce our production levels to better match anticipated demand and to preserve strategically important capital at a time of capital market uncertainty. We pulled back on production and expansion, and reduced fixed and variable costs. These actions had a significant impact on our operating income for the second half of our fiscal year, but helped maintain positive full year cash flow.”

“We are driving our demand creation activities in and beyond our core building integrated photovoltaic markets. This is highlighted by our acquisition of Solar Integrated Technologies (SIT) which expands our capabilities in large projects and strengthens our commercial team globally. SIT also enhances our ability to reduce balance-of-system and installation costs, further improving our competitive levelized cost of energy. Looking ahead, we are cautiously encouraged by an overall uptick in market activity, including a significant increase in the volume of projects on which we are bidding. Overall, our demand-creation strategy and the integration of SIT are key ingredients of our plan to return to profitability,” added Mr. Morelli.

Solar Sector Headed For Price War, Analyst Warns

Posted by Eric Savitz
barrons.com

Macquarie Research analyst Kelly Dougherty this morning turned bearish on the solar sector, cutting ratings on Energy Conversion Devices (ENER), Canadian Solar (CSIQ) and SunPower (SPWRA, SPWRB). Dougherty thinks the companies are going to be hurt by an accelerating price war.

“The Chinese manufacturers have turned up the heat and we don’t see much relief in site,” Dougherty writes. “We expect the Chinese to use their competitive cost structure aggressively to grab share and keep their facilities humming.”

Here’s a rundown on Dougherty’s new views on the individual stocks:

* Energy Conversion Devices: To Underperform, from Neutral, cutting target to $9.50, from $13 (Which compares to yesterday’s close at $12.44. The pressure on pricing from the Chinese players “is compounded by the fact that we believe ENER’s visibility remains very limited,” Dougherty writes. “We can’t overlook the significantly negative impact that further production furloughs could have on the company’s cost structure without a significant pick-up in demand, which seems mroe unlikely given increasingly aggressive Chinese pricing.”
* Canadian Solar: To Neutral, from Outperform. Target price: $17.50, a bit above yesterday’s close at $15.30. “Although CSIQ has nade great strides in improving its cost structure,” the analyst writes, “a price war is likely to mitigate much of those benefits.”
* SunPower: To Underperform, from Neutral. Price target now $23.50, below yesterday’s close at $26.75. “While we continue to believe SPWRA can command a steep pricing premium, a hostile pricing environment is good for anyone,” Dougherty writes. “We don’t expect the premium it is able to command will be meaningful enough to mitigate the margin impact associated with a likely Chinese price war.”

In today’s trading:

* ENER is down 17 cents, or 1.4%, to $12.27.
* CSIQ is down 65 cents, or 4.3%, to $14.65.
* SPWRA is down 50 cents, or 1.9%, to $26.25.

Solar stocks pressured by sales price of panels

Analyst says solar industry faces rising pressure from falling solar panel prices, demand

Tuesday August 25, 2009, 9:21 am EDT

NEW YORK (AP) — Solar panel prices and demand for solar modules will likely decline in the coming quarters, which will lead to a slowdown in production capacity and the overall solar industry said an analyst on Tuesday.

Credit Suisse analyst Satya Kumar said he expects panel prices to decline to $1.50 per watt by the second quarter of 2010, down from $2.35 per watt in the second quarter of 2009. At this lower level, and with polysilicon prices around $50 per kilogram on long term contracts, he expects manufacturing capacity to pull back. Polysilicon is a key raw material used in the production of solar cells.

In the near term, Kumar said he prefers Trina Solar Ltd. (TSL) and Renesola Ltd. (SOL) given their cheap shares and competitive cost structures. Also, Kumar believes these companies will benefit from China’s new feed-in tariff, which will pay for electricity generated by renewable resources. Kumar expects the Chinese government to introduce the tariff in the near future. Kumar rates Trina Solar and ReneSola “Outperform.”

Shares of Trina Solar rose 68 cents, or 2.6 percent, to $26.99 in premarket trading. Renesola shares climbed 24 cents, or 4.5 percent, to $5.53 before the opening bell.

Elsewhere in the industry, Kumar rates Energy Conversion Devices (ENER), First Solar Inc. (FSLR) and JA Solar Holdings Co. Ltd. (JASO) “Neutral.” Shares of Energy Conversion Devices fell 24 cents, or 1.9 percent, to $12.20; First Solar shares rose 82 cents to $124.90 and JA Solar shares increased 3 cents to $3.85 before the opening bell.

Analyst: German solar subsidies not sustainable

Barclays Capital analyst says generous German solar subsidies not sustainable

Dirk Lammers, AP Energy Writer
Monday August 24, 2009, 12:17 pm EDT

SIOUX FALLS, S.D. (AP) — A Barclays Capital analyst said Tuesday that Germany’s residential rooftop subsidies could be cut by 25 percent because of escalating costs.

Vishal Shah said it’s likely the country will revise its generous subsidy program, especially given that German companies are cutting jobs as Chinese companies add capacity and jobs.

Shah said the value of the German solar subsidy cost burden will likely increase from 6 billion euros in 2006 to 11.3 billion euros in 2010, while the value of the German wind subsidy cost burden could decrease from 3 billion euros to 2 billion euros over the same period.

“Bottom line: German solar subsidy costs are escalating and the current trend is not sustainable,” Shah wrote in a client note.

Shah said Barclays’ analysis of California Solar Initiative data suggests that the industry would have to have significantly lower industry pricing to maintain the current growth rate in California.

“We maintain our near-term cautious stance on solar stocks as we believe despite the recent sell-off, expectations are high and potential for downside risk to shipments/margin guidance exists for several stocks,” he wrote.

Shah said that relative to the year’s bump in the S&P 500, the best performing solar stocks include Trina Solar Ltd. (TSL), up 179 percent on the year and 199 percent since the introduction of Chinese incentives in March, and Canadian Solar Inc. (CSIQ), up 147 percent year-to-date and 231 percent since the incentives.

Trina Solar gained 79 cents, or 3 percent, to $26.72 in midday trading, while Canadian Solar shares fell 5 cents to $15.93.

Shah said underperformers include Energy Conversion Devices Inc. (ENER), down 51 percent on the year and 15 percent since the incentives were introduced.

That stock added rose 20 cents to $12.56.

Solar panel prices to slide into next year

Fri Aug 21, 2009 2:02pm EDT
By Laura Isensee – Analysis

LOS ANGELES (Reuters) – A steep fall in the price of solar panels has chipped away at manufacturers’ profits this year, and relief is unlikely to come soon, as many in the industry believe pressure will intensify and push prices even lower into 2010 and perhaps even 2011.

Global demand for solar power soared last year until a pullback in solar incentives in Spain and a credit crisis that stifled financing for new projects led to a falloff in demand for solar panels and a global supply glut.

In turn, solar companies worldwide — including heavyweights like China’s Suntech Power Holdings Co Ltd. (STP), U.S.-based First Solar Inc. (FSLR) and Germany’s Q-Cells AG — have been forced to cut the price of their panels, hampering and in some cases erasing profits.

“I suspect it’s not the bottom,” said Jenny Chase of London-based industry research firm New Energy Finance. Chase said panel prices are still falling because it takes time for the decline to work its way through the supply chain, and costs of the industry’s primary raw material, silicon, are still high despite having dropped sharply since last year.

Fears of a prolonged decline in panel prices have weighed heavily on solar stocks this month, and Jefferies & Co cited the continued slide on Friday when it cut its ratings on First Solar, SunPower Corp. (SPWRA, SPWRB), Suntech Power, and Energy Conversion Devices Inc. (ENER).

After peaking at $4.20 a watt in 2008, prices for solar panels have dived as much as 50 percent to about $2.40 a watt for European and U.S. companies that make silicon-based panels and $2.00 a watt for Chinese suppliers, Chase said. Prices on lower-cost thin film panels are between $1.00 and $2.00 a watt.

The bottom-out price “could be as low as $1.50 for crystalline silicon, which would be a shockingly low price,” Chase said.

Lower prices are good news for solar customers as the cost of the renewable energy source reaches toward that of power created from dirtier sources such as natural gas and coal. Still, the drastic pace of the tumble has sent many companies scrambling.

“It does you no good to get the prices down there and close to grid parity if you’re losing money on every one,” said Kevin Landis, chief investment officer of Silicon Valley-based Firsthand Funds and manager of the $5.4 million Firsthand Alternative Energy Fund.

Jefferies Turns Cautious; Downgrades Many Stocks

Posted by Eric Savitz
barrons.com

Jefferies & Co. analyst Paul Clegg this morning turned cautious on the solar sector, slicing his ratings on many companies in the sector.

A key issue, Clegg writes in a research note, is that the downward spiral in pricing is likely to continue. “While accompanied by reduced production costs, we believe this could lead to weaker-than-expected 2010 ests and concerns about value destruction in the sector,” he writes. ” In our view, liberal Chinese lending practices encourage over-production and capacity expansions in a market that needs rationalization.”

Clegg concedes that falling prices bring the market closer to grid parity, but he adds that the slide could also trigger political backlash to government incentives, as European PV makers get hurt by Chinese competition with the help of European tax-payer and rate-payer money. While end markets are showing signs of improvement, he adds, “they are slow and do not appear ready to support the levels of volume production being planned for 2010.”

Clegg adds that even if falling silicon prices help solar companies maintain unit gross margins, “lower ASPs make them more dependent on chasing volumes to support the marketing and distribution networks necessary to drive growth.”

The Jefferies analyst sees ASPs down 20%-25% by Q4 from Q2, with another 15%-20% drop by Q4 2010.

Here’s a rundown on his downgrades today:

* Ascent Solar (ASTI): To Underperform from Hold.
* China Sunergy (CSUN): To Underperform from Hold.
* Energy Conversion Devices (ENER): To Underperform from Hold.
* Evergreen Solar (ESLR): To Underperform from Buy.
* First Solar (FSLR): To Hold from Buy.
* Solarfun (SOLF): To Underperform from Hold.
* SunPower (SPWRA, SPWRB): To Hold from Buy.
* Suntech (STP): To Underperform from Hold.
* MEMC Electronic Materials (WFR): Maintains Buy rating.