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* Says prior FY rev outlook no longer applicable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 As a result, our prior full year revenue production is no longer applicable,” Chief Financial Officer Harry Zike said on the call.

First Solar buys 117 MW project from solar startup

Wed Nov 4, 2009 8:39pm EST

* Solar thermal co Ausra started project in 2007

* Financial terms not disclosed

* First Solar says deal to make way for other project

LOS ANGELES, Nov 4 (Reuters) – Solar industry bellwether First Solar Inc (FSLR) said on Wednesday that it bought a 117 megawatt project in California from Kleiner Perkins-backed solar thermal start-up Ausra Inc, a move that could speed up another 550 MW project in First Solar’s pipeline.

The companies did not disclose the financial terms.

Ausra, which is also backed by Khosla Ventures, said that the sale of the project — called Carrizo Energy Solar Farm — follows its strategy to move away from developing solar projects and focus on supplying large-scale solar steam generators.

“The sale of Carrizo is another step in executing our plan,” said Tom Bartolomei, senior vice president of business development at Ausra, in a statement.

Ausra landed a power purchasing agreement with California utility PG&E (PCG) two years ago for the project, located in San Luis Obispo County. That agreement was withdrawn as part of the sale, the company said.

First Solar can use the newly acquired land to revise the layout of the larger 550 MW Topaz Solar Farm project, which has run into “concerns such as farmland conservation and wildlife needs,” said Kathryn Arbeit, who oversees Topaz.

Both projects include land near each other in San Luis Obispo County.

Shares of First Solar closed down 2 percent at $121.59 on Wednesday on the Nasdaq.

(Reporting by Laura Isensee; Editing by Steve Orlofsky)

SolarWorld keeps 2009 outlook, Q3 weak

Wed Nov 4, 2009 8:20am EST

* Confirms 2009 sales outlook of 1 bln eur

* Q3 EBIT 34.7 mln eur vs 38 mln eur estimate

* Company had to fend off 25 pct price slump

* Shares up 1.5 percent vs FTSE clean tech index up 0.8 pct

By Christoph Steitz

FRANKFURT, Nov 4 (Reuters) – SolarWorld on Wednesday reaffirmed a full-year sales target of 1 billion euros ($1.47 billion) despite cutting prices by a quarter and missing third-quarter operating earnings forecasts.

Germany’s No.3 solar company reported third-quarter sales at 232.5 million euros and earnings before interest and tax (EBIT) amounted at 34.7 million. Analysts in a Reuters poll on average expected sales of 270 million and core earnings of 38 million.

Overcapacity of solar cells and modules has led to massive price declines, bringing growth in the once-booming sector to a near standstill at a time when companies have huge difficulties finding funding for cash-intensive solar projects.

“We had to stave off a price fall of 25 percent,” SolarWorld Chief Executive Frank Asbeck, sometimes called the “Sonnenkoenig” (Sun King), told Reuters, adding that some of it was offset by cost cuts.

SolarWorld’s shares rose 1.5 percent by 1224 GMT, outperforming the FTSE clean tech index .FTET50, which gained 0.8 percent.

SolarWorld has survived the downturn better than its peers, countering massive price declines for cells and modules by making everything from components to panels.

FILTER THROUGH

But analysts have warned it was only a matter of time before the price slump would filter through to players that are active in more than one part of the solar value chain.

Larger Norwegian rival Renewable Energy Corporation ASA (REC) — which had sales of 6.480 billion Norwegian crowns ($1.11 billion) in the first nine months of 2009 — said last week overcapacity in the industry would continue into next year. It missed third-quarter forecasts.

Yet in some regions it spotted early signs of improved demand for modules, a slightly more optimistic view than U.S. bellwether First Solar (FSLR) gave last week.

The question is now whether SolarWorld will be able to meet its 1 billion euros sales target.

“This seems aggressive as it is based on record sales of 366 million euros in the fourth quarter,” SES Research analyst Karsten von Blumenthal wrote, keeping a “buy” rating.

Societe Generale analyst Didier Laurens, also with a “buy” rating on the stock, wrote that the company’s existing inventory should enable the group to meet its sales target.

Analysts in a Reuters poll expect on average full-year sales of 976 million euros.

(Additional reporting by Anneli Palmen in Duesseldorf)

Q-Cells ends LDK supply agreement, claims guarantee

Mon Nov 2, 2009 2:51pm EST

* Q-Cells to apply to draw on bank guarantee

* LDK disputes Q-Cells claims, says will defend itself

* LDK shares tumble 20 pct; Q-Cells down 2.5 pct

By Christoph Steitz and Laura Isensee

FRANKFURT/LOS ANGELES, Nov 2 (Reuters) – Germany’s Q-Cells ended an agreement with its Chinese solar wafer supplier, LDK Solar (LDK), a sign that the solar industry is continuing to struggle with an oversupply of materials.

Q-Cells, one of the world’s largest makers of solar cells, said on Monday that LDK did not fulfill “significant contractual obligations” in a 10-year agreement to supply wafers to Q-Cells. The companies entered the contract when wafer prices were much higher.

LDK, whose shares dropped 20 percent on Monday, said in a statement that it “vigorously disagrees” with Q-Cells’ claims and plans to defend itself against what it called a wrongful termination.

The move comes as manufacturers of solar cells and panels around the world are struggling with oversupply that has driven down prices and curbed demand.

Prices for polysilicon — a key raw material for the solar industry — and for solar panels have tumbled dramatically in the last year, forcing many players to renegotiate contracts.

“People are coping with oversupply and companies are learning that long-term contracts don’t mean much in a down cycle,” said Oppenheimer & Co analyst Sam Dubinsky.

Q-Cells said in a statement that “the contractual parties have differing opinions concerning the validity of the termination of the agreement” and its plans to reclaim a $244.5 million prepayment it made in 2008 related to the agreement.

“Discussions between the two companies and a parallel arbitration process at the International Chamber of Commerce (ICC) in Paris have not resulted in an amicable settlement yet,” the company added.

Solar power execs bullish on 2010 despite earnings

Thu Oct 29, 2009 7:36pm EDT

* Execs with Suntech, BP Solar, others see growth in 2010

* Driven by government aid, improved financial markets

* See fall in panel prices stabilizing

By Laura Isensee

ANAHEIM, California, Oct 29 (Reuters) – Executives from solar power companies see clearer skies in 2010 for the beleaguered industry, even as quarterly reports from heavyweights like First Solar Inc. (FSLR) and SunPower Corp (SPWRA, SPWRB) have disappointed investors and dragged down shares.

The industry has struggled to emerge this year from tight credit markets, a global glut of panels and falling prices.

“I think we’re already in the middle of a turnaround. We’ve kind of gone through the low point of the recent past,” said Steven Chan, Suntech Power Holdings Co Ltd’s (STP) chief strategy officer, in an interview with Reuters.

Executives from Sharp Corp, BP’s (BP) solar unit and other solar power players shared similar optimism about the sector’s outlook in 2010 at the Solar Power International conference being held in Anaheim, California, this week.

“Demand’s really good going into 2010. Visibility is a hell of a lot better than it was coming into 2009,” SunPower’s chief executive Tom Werner told reporters at the conference.

The industry, which grew at a clip of more than 40 percent for several years, has suffered in the recession, but solar companies kept a bullish attitude on growth next year.

Executives cited various forces that could drive growth in 2010, including U.S. stimulus funds for green projects, extended tax incentives and new financing.

First Solar Crushed; Merrill, Caris, Gabelli Downgrade

By Eric Savitz
barrons.com

First Solar (FSLR) shares are getting absolutely crushed today, after a disappointing Q3 earnings report and weaker Q4 guidance. The combination triggered some extremely bearish Street commentary, and spurred at least three analysts to issue downgrades.

* Bank of America/Merrill Lynch analyst Steven Mliunovich cut his rating on the stock to Neutral from Buy, with a new price target of $135, down from $180. He chopped his 2010 EPS estimate to $7.22, from $6.25. “It’s difficult to see upside catalysts given concerns regarding pricing and the German feed-in tariff along with the company’s limited ability to increase production if demand surprises on the upside.,” he writes. “We see four quarters of year-over-year earnings declines, not typically good for stock performance.”

* Caris & Co. analyst Ben Pang cut his rating to Above Average from Buy, and reduced his target to $162 from $205. He says that “earnings leverage is trending below our expectations…as pricing erosion and potential tariff changes will continue to pressure margins.” He says FSLR is likely go gain share, but that multiple expansion is unlikely unless the company can deliver higher efficiencies or better margins.

* Gabelli & Co. analyst Hendi Susanto downgraded the stock to Hold from Buy, noting that the pricing outlook is uncertain given a potential FIT reduction in Germany and competition with silicon-based providers. Susanto says the reduced rating reflects “narrowing margin and concern about impact of FIT reduction and further pricing competition with crystalline silicon modules.”

Meanwhile, Pacific Crest analyst Mack Bachman writes that press reports that the revenue miss reflects a revenue recognition push-out from a single project are wrong. “The revenue miss was due to a lack of module sales despite management giving away more than $60 million in price concessions in Q3,” he writes. “We are concerned that the rebate did not create demand.” His advice: “Put money to work elsewhere.”

FSLR today is down $22.96, or 15.2%, to $128.62

First Solar shares plunge on 3Q revenue miss

First Solar shares plunge sharply on 3rd-qtr revenue miss, but analysts remain bullish

2:57 pm EDT, Thursday October 29, 2009

NEW YORK (AP) — Shares of First Solar Inc. (FSLR) tumbled Thursday after the nation’s largest solar panel maker reported third-quarter revenue far below analyst expectations, even though analysts remained bullish on the company.

First Solar shares plunged $22.69, or 15 percent, to $128.89 in afternoon trading. The stock has traded between $85.28 and $207.51 over the past year.

Late Wednesday, the company reported a 55 percent leap in third-quarter earnings on a 38 percent increase in revenue. But sales of $480.9 million missed the average analyst estimate of $528.8 million, as measured by a Thomson Reuters survey.

The company said its Sarnia project in Canada is about 65 percent complete. Although all modules produced during the quarter were shipped, about $58 million in revenue won’t be recognized until the fourth quarter, the company said.

“This is truly a timing issue,” Chairman Mike Ahearn said on a conference call with analysts. “That project has been sold, the contract wasn’t signed until early in the fourth quarter. We remain on track for annual guidance.”

“Don’t sweat the revenue miss,” said John Roy, an analyst with Janney Capital Markets. He reiterated a “Buy” rating and $185 share price target.

“While the lower revenue was a slight disappointment, we do not view it as a cause for concern and believe it will be made up in the fourth quarter,” Roy said in a note to clients. He added that the results do not change his view that First Solar should remain the low-cost industry leader for the foreseeable future and will likely gain share value in large-scale projects.

Lazard Capital Markets analyst Sanjay Shrestha said First Solar’s pressured share price presents an opportunity to buy up shares at a discount. He reiterated a “Buy” rating and $190 price target.

Jefferies & Co. analyst Paul Clegg said First Solar is positioned to generate greater cash flow returns than its peers, and he can hardly imagine a market scenario where that is not the case.

“We believe that First Solar’s cost structure will remain the lowest in the industry even if silicon prices continue to decline,” Clegg said as he maintained his “Hold” rating and $130 price target.

First Solar falls 17%, but analysts calm

NEW YORK (MarketWatch) — First Solar (FSLR) fell 17% to $126.60 on Thursday after the thin film solar panel maker weighed in with its earnings. Analysts at Jefferies said First Solar missed its revenue target due to $58 million in sales that will be recognized in the fourth quarter. Jefferies reiterated its hold rating and price target of $130 a share. “We believe that First Solar’s cost structure will remain the lowest in the industry even if silicon prices continue to decline,” analysts said.

Lazard Capital Markets reiterated its buy rating on the stock. “With shares under pressure on revenue deferral into fourth quarter and concern surrounding margin guidance, which simply reflects a higher mix of system business, we encourage accumulating positions on this weakness,” Lazard analysts said.

First Solar reports profit growth, but revenue disappoints and shares fall

11:24 pm EDT, Wednesday October 28, 2009

TEMPE, Ariz. (AP) — First Solar Inc. (FSLR), the nation’s largest solar panel maker, said on Wednesday that its third-quarter profit jumped almost 55 percent on higher revenue. But revenue fell well short of analyst expectations because of a contract that wasn’t signed until the current quarter, sending shares tumbling in late trading.

The company said it earned $153.3 million, or $1.79 per share, for the quarter that ended Sept. 26. That was up from $99.3 million, or $1.20 per share, during the quarter that ended Sept. 27, 2008.

Revenue rose 38 percent to $480.9 million from $348.7 million a year earlier.

Profit topped the $1.74 per share that analysts surveyed by Thomson Reuters were expecting, but revenue was shy of the $528.8 million average estimate.

The company said its Sarnia project in Canada is about 65 percent complete. Although all modules produced during the quarter were shipped, about $58 million in revenue won’t be recognized until the fourth quarter, the company said.

“This is truly a timing issue,” Chairman Mike Ahearn said on a conference call with analysts. “That project has been sold, the contract wasn’t signed until early in the fourth quarter. We remain on track for annual guidance.”

First Solar also said revenue fell from the second quarter because reduced pricing driven by its rebate program, foreign exchange fluctuations and the fact that the second quarter benefited from $27 million of deferred revenue from another project.

First Solar said market demand is seasonally stronger, and inventories have been reduced. The company now forecasts full-year revenue of $1.97 billion to $2.02 billion, in line with analysts’ average forecast of about $2 billion.

The company’s shares fell $24.08, or nearly 16 percent, to $127.50 in aftermarket trading, after closing up $1.36 at $151.58 before the results were released.

FSLR: Sees Q4 Margin Erosion

By Tiernan Ray
barrons.com

During a conference call with analysts this evening, management of solar energy technology vendor First Solar (FSLR) talked folks through the revenue miss in the third quarter that pushed shares down over 15% this evening.

The dip in revenue from $525 million in Q2 to $480 million in Q3, below analysts’ estimates, was because of a single order that were “not able to be recognized” — in other words, implying cash collected but not able to be recorded on the income statement within the quarter. The company did not make clear when that revenue will be recognized.

In addition to the revenue miss, analysts will be pouring over the gross margin implications. The company said that a rebate program initiated last quarter to goose solar investment knocked down gross profit. Indeed, gross profit as a percentage of sales fell from 57% in the second quarter to 50.9% last quarter.

That’s going lower in the current quarter, management said, to a range of 41% to 44%. The company said it saw a big uptake of the rebates and purchases qualifying for the rebates, and that the rebate policy would continue in Germany as the pricing of silicon-based solar panel technology was “much more competitive” at present than in past. About the only good news on rebates and margins was that the company does not expect to extend its rebate plan outside of Germany.

As for recent speculation about whether Germany will reduce subsidies for solar technology purchases, company management said it’s “difficult to handicap where that is going to come out.”

First Solar, Inc. Announces 2009 Third Quarter Financial Results

Fiscal 2009 Revenue Guidance Expected at the High End of the Prior Guidance Range

4:03 pm EDT, Wednesday October 28, 2009

TEMPE, Ariz.–(BUSINESS WIRE)–First Solar, Inc. (FSLR) today announced its financial results for the third quarter ended September 26, 2009. Quarterly revenues were $480.9 million and excluded the Sarnia project, which was over 65% completed at quarter end. Revenues were $525.9 million in the second quarter of fiscal 2009 and $348.7 million in the third quarter of fiscal 2008.

Revenues for the first nine months of fiscal 2009 were $1,424.9 million compared to $812.7 million for the first nine months of fiscal 2008.

Net income for the third quarter of fiscal 2009 was $153.3 million or $1.79 per share on a fully diluted basis, down from $180.6 million or $2.11 per share on a fully diluted basis for the second quarter of fiscal 2009 and up from $99.3 million or $1.20 per share on a fully diluted basis for the third quarter of fiscal 2008.

The Company has also posted its Earnings Call Presentation, which includes updated guidance for fiscal 2009 on the Company’s web site. The Company expects full year fiscal 2009 revenue at the updated guidance range of $1.975 to $2.025 billion, which is at the high end of the previously provided guidance range.

First Solar will discuss these results and outlook for fiscal 2009 in a conference call scheduled for today at 1:30 p.m. MST (4:30 p.m. EDT). Investors may access a live audio webcast of this conference call or the Earnings Call Presentation in the Investors section of the Company’s web site at www.firstsolar.com. An audio replay of the conference call will also be available approximately two hours after the conclusion of the call. The audio replay will remain available until Monday, November 2, 2009 at 11:59 p.m. EDT and can be accessed by dialing 888-203-1112 if you are calling from within the United States or 719-457-0820 if you are calling from outside the United States and entering access code 1744958. A replay of the webcast will be available on the Investor section on the Company’s Web site approximately two hours after the conclusion of the call and will remain available for 90 calendar days. If you are a subscriber of FactSet and Thomson One, you can obtain a written transcript within two hours.

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: German Subsidy Update

By Tiernan Ray
barrons.com

Analysts this morning are parsing the fine print of a four-year coalition agreement ratified in Germany today that will likely have an impact on funding for solar technology projects, and on solar technology vendors such as First Solar (FSLR) and SunPower (SPWRA, SPWRB).

As Bloomberg notes, German Chancellor Angela Merkel’s Christian Democratic Union pushed through measures for a $36 billion tax cut meant to spur economic growth, a compromise with more aggressive proposals. The measures relating to solar funding appear vague and thus open to widely differing interpretations.

The agreement does not call for immediate cuts in the so-called feed-in tariff for solar projects, subsidies that have helped boost German investment in the technology, writes Collins Stewart analyst Dan Ries. The agreement “highlights that the coalition is committed to solar and indicates that the government will pursue a dialog with the solar industry and community leaders to determine if the current subsidy is too generous.”

Ries is optimistic, writing that “we do not believe the outcome will be as harsh as the “enormous” one-time cut of perhaps 20-30% reported in the press.”

Hapoalim Securities analyst Gordon Johnson, on the other hand, believes cuts to subsidies won’t be “less severe,” as Ries and others believe. In fact, “we see this as confirmation that Merkel’s new coalition sees an immediate need to adjust current incentives for solar PV technologies,” he writes. “Furthermore, there was mention of focusing incremental ground based solar PV systems on “sealed” land – our discussions with contacts in Germany this morning suggest this could materially limit the sites new free-field solar projects in Germany can be placed.”

But as Johnson notes, it’s possible that a future limiting of subsidies will have a positive near-term impact on demand, causing projects to rush to use existing subsidies. But Johnson believes this will be small comfort given what he argues is an industry-wide glut of polysilicon (the raw material for many solar devices), solar wafers, and photovoltaic cells and modules, “we see acute risk of industry wide multiple compression on the horizon.”

The effects of the a potential tariff cut have already begun to be felt by some vendors. SunPower, for example, last Thursday offered a disappointing Q4 revenue outlook, which some analysts attributed to orders being pulled into last quarter from the current quarter, as projects scrambled to buy panels before tariffs run dry.

Sunpower shares today are down 90 cents, or 3%, at $27.45, while First Solar’s stock is up $2.51, or 1.7%, at $154.90.

Largest solar panel plant in US rises in Florida

Largest solar panel plant in US soaks up rays in sleepy Florida town

By Christine Armario, Associated Press Writer
4:59 pm EDT, Friday October 23, 2009

ARCADIA, Florida (AP) — Greg Bove steps into his pickup truck and drives down a sandy path to where the future of Florida’s renewable energy plans begin: Acres of open land filled with solar panels that will soon power thousands of homes and business.

For nearly a year, construction workers and engineers in this sleepy Florida town of citrus trees and cattle farms have been building the nation’s largest solar panel energy plant. Testing will soon be complete, and the facility will begin directly converting sunlight into energy, giving Florida a momentary spot in the solar energy limelight.

The Desoto Next Generation Solar Energy Center will power a small fraction of Florida Power & Light’s (FPL) 4-million plus customer base; nevertheless, at 25 megawatts, it will generate nearly twice as much energy as the second-largest photovoltaic facility in the U.S.

The White House said President Barack Obama is scheduled to visit the facility Tuesday, when it officially goes online and begins producing power for the electric grid.

As demand grows and more states create mandates requiring a certain percentage of their energy come from renewable sources, the size of the plants is increasing. The southwest Florida facility will soon be eclipsed by larger projects announced in Nevada and California.

“We took a chance at it and it worked out,” said Bove, construction manager at the project, set on about 180 acres of land 80 miles southeast of Tampa. “There’s a lot of backyard projects, there’s a lot of rooftop projects, post offices and stores. Really this is one of the first times where we’ve taken a technology and upsized it.”

Despite its nickname, the Sunshine State hasn’t been at the forefront of solar power. Less than 4 percent of Florida’s energy has come from renewable sources in recent years. And unlike California and many other states, Florida lawmakers haven’t agreed to setting clean energy quotas for electric companies to reach in the years ahead.

Solar recovery to start, but 2010 outlook dim

Fri Oct 23, 2009 9:22am EDT

* Q3 will show signs of recovery, but pressure remains

* Downstream set to outperform upstream players

* 2010 outlook for sector remains cloudy

By Christoph Steitz

FRANKFURT, Oct 23 (Reuters) – European solar equipment makers are slowly emerging from the crisis that has hit the sector, quarterly results will show, but the outlook beyond 2009 will be uncertain due to tight credit and oversupply.

Europe’s solar companies are expected to show signs of recovery when third-quarter earnings kick off next week, with analysts expecting capacity adjustments and the shift of production abroad to benefit companies.

European solars, along with their U.S. and Chinese peers, have to deal with a toxic mix of oversupply of cells and modules as well as a credit squeeze that has triggered a wave of quarterly losses and outlook cuts in the funding-hungry sector.

In addition, Asian competitors that are producing at much lower prices have put heat on their European peers, which are burdened by high labour costs.

But the worst could be over for Europe after companies wrote down the value of their inventories, slashed jobs and shifted production abroad in a bid to stay competitive.

“Q3 reporting should give a strong indication for a recovery of the European solar manufacturing industry, which has been hit over-proportionately hard during the latest crisis,” Oppenheim Research analysts wrote.

First solar IPO in 15 months set to price Nov. 5

Thu Oct 22, 2009 11:38am EDT

* Company sees net IPO proceeds of $25.4 mln

* Sales fell 14 pct in first half of 2009

* Execs selling 81.3 pct of the IPO’s shares

NEW YORK, Oct 22 (Reuters) – STR Holdings Inc (STRI) set terms for what is likely to become the first U.S.-listed initial public offering by a solar company in 15 months.

The Connecticut-based company, which provides encapsulants that protect a solar module’s semiconductor circuit, plans to sell 12.3 million shares for between $13 and $15 each, raising an estimated $172 million, according to an updated prospectus filed on Thursday with U.S. regulators. The shares would trade on the New York Stock Exchange, under the ticker symbol “STRI.N” (STRI).

Its encapsulants are used in both crystalline and thin-film solar modules.

The last solar company to go public in a U.S.-listed IPO was GT Solar International Inc (SOLR), which raised $500 million but has fallen 65.5 percent since then.

Solar stocks have struggled in the past year as the credit crisis has constricted financing for solar projects; but experts believe the industry will resume its growth trajectory in 2010, aided by the first real installment of “green” stimulus dollars pledged by the major economies.

Of the shares in the IPO, 10 million shares are being offered by the company’s executives, while the remainder would be sold be the company, which estimated net proceeds of $25.4 million, with which it would pay down debt.

Its clients include BP Plc’s (BP) BP Solar and First Solar Inc (FSLR). The company also offers quality assurance services such as inspection, testing and auditing to consumer products makers.

The deal is expected to price on Nov. 5 and debut on the NYSE the next day, an underwriter said.

In the first half of 2009, STR had sales of $117.7 million, down 14 percent from the year-earlier period, and net income of $6.2 million.

The IPO’s underwriters, led by Credit Suisse and Goldman Sachs & Co, will have the option to buy another 1.8 million shares.

(Reporting by Phil Wahba, editing by Gerald E. McCormick)

Thinking solar power? It’s never been cheaper

Subsidies and a glut of panels; in some places, solar’s never been cheaper

By Chris Kahn, AP Energy Writer
4:16 pm EDT, Wednesday October 21, 2009

NEW YORK (AP) — Jillian Lung says she’s no environmentalist. Still, she couldn’t pass up a chance to install a carpet of solar panels atop her co-op in Queens.

“At these prices, why not?” Lung said.

The government has plowed so much cash into the solar industry that it’s effectively pulled the luxury tag off of home solar systems. Combined with local incentives, buyers can save up to 90 percent on a system, whether it’s for a single-family home or a 75-unit condo in the city.

Thousands of homeowners are finding they can pay off a rooftop solar system in just a few years and then start pocketing the energy savings.

Lung, the co-op president, stumbled into solar subsidy programs last year as she priced out roof repairs. City, state and federal incentives covered nearly three-quarters of the tab for a $394,514 solar system.

The building flipped the switch on in July and already cut last month’s electric bill in half.

“This was just icing on the cake,” Lung said. “We had to change the roof anyway.”

Solar power has been getting cheaper for years. Panel prices declined 31 percent from 1998 to 2008 because of lower manufacturing and installation costs and state and local subsidies, according to a study released Wednesday by Lawrence Berkeley National Laboratory. But it still took a ramp up in federal incentives this year to bring the cost within many people’s reach.

More than half the states in the U.S. and Washington D.C. offer enough incentives to cut the costs by 40 percent or more, according to Amy Heinemann, a policy analyst at the Database of State Incentives for Renewables and Efficiency.

How much you’ll spend depends on where you live.

With subsidy cuts coming is it time to sell solar?

Fri Oct 16, 2009 4:02pm EDT

* Anxiety about German subsidy cuts weighs on sector

* One analyst sees opportunity in SunPower

* Analyst cuts two German solars: Q-Cells and SolarWorld

By Laura Isensee

LOS ANGELES, Oct 16 (Reuters) – Shares of U.S.-listed solar companies slipped this week as investors fret over how much and when Germany’s government will cut aid to its solar industry, the world’s top market.

The Free Democrats are joining Chancellor Angela Merkel’s conservatives in the governing coalition and have called for reduced solar supports, fueling speculation on the final form.

Only a small portion of photovoltaic systems that convert sunlight into electricity may see cutbacks, according to a draft proposal by a German coalition working group for environmental policy.

Shares of First Solar Inc (FSLR), Suntech Power (STP), SunPower Corp (SPWRA, SPWRB), Yingli Green Energy (YGE) and Trina Solar (TSL) have fallen 4 to 7 percent since Monday.

With specific changes still uncertain, should investors hold or even pull back on solar shares until a final decision?

Four analysts weigh in:

Solar companies defend accounting practices

Fri Oct 16, 2009 2:25pm EDT
By Laura Isensee

LOS ANGELES (Reuters) – U.S.-based First Solar Inc. (FSLR) denied it was using aggressive accounting methods to support its earnings growth, despite concerns from some analysts that its cash flows were beginning lag profit levels.

“We report net income and net cash provided by operating activities in accordance with U.S. GAAP,” the company said in an email, referring to the Generally Accepted Accounting Principles.

First Solar and other leading solar companies such as China’s Suntech Power Holdings Co Ltd (STP) and California- based SunPower Corp. (SPWRA, SPWRB) are expected to report their quarterly earnings in the coming weeks.

Those figures are expected to be their brightest earnings in a year since a global glut of solar panels and lack of financing has hurt the industry.

Yet some analysts have said cash flow at those companies has lagged behind reported profit in recent quarters, which could mean the companies are using aggressive accounting and may not be able to sustain their earnings.

“If that continues, your operating results look good, but your tangible cash flow is declining because you’re not collecting on your revenues. That’s a formula for disaster for any company,” said Gordon Johnson, an analyst with Hapoalim Securities.

First Solar attributed the lag in cash flow for the first and second quarters of 2009 — $101 million and $158 million, respectively — to several factors.

First Solar Added to the S&P 500 Index

9:00 am EDT, Friday October 16, 2009

TEMPE, Ariz.–(BUSINESS WIRE)–First Solar Inc. (FSLR), the world’s leading manufacturer of photovoltaic modules, today announced that the company’s common stock was added to the S&P 500 Index after the market closed on Oct. 15, 2009.

First Solar is the first pure-play renewable energy company to be added to the index, which represents a milestone for the solar industry.

The company will be added to the S&P 500 GICS (Global Industry Classification Standard) Electrical Components & Equipment Sub-Industry of the Industrials sector.

U.S. solar firms’ 3Q accounting may get hard look

Wed Oct 14, 2009 6:36pm EDT

* 3rd-qtr results expected to reflect uptick in demand

* Analysts warn cash flow vs net income needs hard look

* Market watching outlook for fourth, first quarters

By Laura Isensee

LOS ANGELES, Oct 14 (Reuters) – Solar companies are likely to report their brightest earnings in a year as the industry emerges from a brutal downturn, but analysts warn aggressive accounting may cast a shadow on the sector’s outlook.

The nascent industry has seen its profit margins and sales growth erode in the past 12 months as a glut of supply and a dearth of financing in the industry stunted the business, which had been expanding by more than 40 percent per year.

Still, analysts expect companies such as First Solar Inc (FSLR), SunPower Corp (SPWRA, SPWRB) and Chinese-based Suntech Power Holdings (STP) to report more demand in the third quarter, helped by a U.S. government economic stimulus spending and increased lending by big banks that pulled back in 2008.

Whether that upturn emerges remains to be seen, and some analysts have said a worrying sign began to emerge in recent quarters as cash flow at the companies began to lag behind reported profit. The worry is that such a lag could mean companies are using aggressive accounting and may not be able to maintain their earnings.

“If that continues, your operating results look good, but your tangible cash flow is declining because you’re not collecting on your revenues. That’s a formula for disaster for any company,” said Gordon Johnson, analyst with Hapoalim Securities.

Johnson cited First Solar, whose cash flow from operations was $101 million and $158 million below net income in the first and second quarters, respectively.

Next German gov’t to cut solar subsidies

Future German government to cut subsidies for solar, other renewable industries

4:55 pm EDT, Tuesday October 13, 2009

BERLIN (AP) — Germany’s next government is considering slashing subsidies to renewable energy industries, particularly solar, an energy expert with Chancellor Angela Merkel’s Christian Democrats said Tuesday.

Michael Fuchs, an energy expert with the conservatives, told reporters after the committees for the environment and commerce met to hammer out the details of a new government contract said the most successful technologies would be the first to see cuts.

“Where it makes sense, will may have to make cuts — for example where technology has led to a reduction in price, as with solar energy for example,” Fuchs said.

Investors expected Germany to cut back on solar subsidies this year as the recession sapped demand and tightened government budgets, said Benedict Pang, an analyst with Caris and Company in San Francisco.

“During the downturn, the wheels started to come off” in Germany, Pang said. “A lot of solar companies have weaned themselves off of that market.”

First Solar, Inc. (FSLR), one of the largest American companies installing panels in Germany, spent much of the summer peddling its services in China. The Tempe, Ariz.-based company was rewarded last month with a massive 2-gigawatt project north of the Great Wall.

“You need to be able to go to wherever the business is and get the projects,” Pang said.

A section of the proposed contract leaked to the Handelsblatt daily Tuesday said that government money for renewable energy industry “must be critically reviewed,” noting that given the drop in the price of solar panel production, subsidies for solar energy could be cut as early as 2010.

The junior party in Merkel’s new coalition, the Free Democrats, are against the subsidies, arguing that they hurt competition by driving up the price of energy. Merkel is forming a new government with the Free Democrats following Sept. 27 parliamentary elections.

Germany has guaranteed renewable energy generators fixed payments for the power they produce to encourage the production of solar panels and several of the world’s leading producers of the technology are based here.

Shares of Solarworld AG dropped 2.39 percent to 16.32 euros ($24.26) on the news. First Solar gave up $5.68 to close at $155.02 per share and SunPower Corp. (SPWRA, SPWRB) lost 27 cents to close at $32.55 a share.

AP Energy Writer Chris Kahn contributed to this story from New York.

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.

California heats up incentives for solar power

Mon Oct 12, 2009 4:22pm EDT

* California sets new feed-in tariff for solar power

* State, Dept of Interior to fast-track renewable projects

* California-based SunPower could win under new subsidy

By Laura Isensee

LOS ANGELES, Oct 12 (Reuters) – California is heating up its push for clean energy, as Governor Arnold Schwarzenegger approved a new subsidy for solar power on Monday and joined forces with the federal government to fast-track renewable energy projects.

California has the most aggressive renewable energy goals in the United States, which Schwarzenegger increased last month when he ordered that the state get a third of its electricity from renewable resources by 2020.

FBR Capital Markets analyst Mehdi Hosseini said the new subsidy for solar generation could be “explosive” on top of the existing investment tax credit for installing solar systems.

“This is above and beyond the subsidies that are already in place,” Hosseini said.

Feed-in tariffs set a higher price for renewables, and in Germany, such tariffs have pushed the country to be the world’s market leader in solar power.

NEW PROGRAMS

California’s new solar program guarantees that utilities will pay owners of commercial solar systems — up to 3 megawatts in size — a higher price for solar electricity, a subsidy meant to spur development of solar rooftop systems.

Currently, if utilities want to charge more than the retail price for such systems they have to ask for permission from regulators. Now the California Public Utilities Commission will set the price.

Solar shares rise with broader market strength

Shares of solar companies climbed across the board on broader market strength

3:37 pm EDT, Tuesday October 6, 2009

NEW YORK (AP) — Shares of solar stocks rose across the board on Tuesday along with the broader market, which strengthened on rising expectations for a global economic recovery.

FBR Capital Markets analyst Mehdi Hosseini said First Solar Inc. (FSLR), the nation’s largest solar panel maker, is poised to “benefit handsomely” from the weakened dollar, as the company still recognizes a majority of sales in euros, while its cost of goods sold are recognized in dollars.

Hosseini said that the company’s power purchase agreement to Enbridge Inc. (ENB), Canada’s largest pipeline operator, is encouraging, but warned that First Solar’s income statement is in a “transitional” period, leading him to believe there is still “significant downside risk” to the 2010 consensus earnings estimate of $7.27 per share. Hosseini expects a profit of only $5 per share. He rates the company “Underperform,” with a price target of $110.

Shares of First Solar rose $2.23 to $150.81.

Looking to solar-electric systems maker SunPower Corp. (SPWRA, SPWRB), Hosseini raised his third-quarter shipment estimate to 90 megawatts, up from 85 megawatts, as the solar photovoltaic market is strengthened by the rooftop segment. For the same period, Hosseini expects the company to install more than 40 megawatts worldwide, compared with a previous expectations of less than 40 MW of system installations.

Hosseini rates the company “Outperform” with a price target of $40.

Shares of SunPower rose 83 cents, or 3 percent, to $28.80 in afternoon trading.

Elsewhere in the sector, Yingli Green Energy Holdings Co. (YGE) shares rose 60 cents, or 5 percent, to $12.58. Shares of Trina Solar Ltd. (TSL) rose $2.26, or 7.4 percent, to $32.52.