North Coast Solar Stocks

June 2, 2009

Solar power executives remain cautious

Filed under: ENER, SPWR — Tags: , , , , , — Jason @ 3:48 pm

Tue Jun 2, 2009 3:48pm EDT
By Michael Erman and Nichola Groom

NEW YORK (Reuters) – Solar power executives are cautious about the remainder of 2009 after being pummeled by plunging demand during the global credit crisis.

“There are positive signs,” said SunPower Corp (SPWRA, SPWRB) Chief Executive Tom Werner, who said the company had seen six weeks of encouraging trends during the first half of this quarter.

“The worry, of course, is that this is one of those W (shaped) recoveries where maybe it doesn’t sustain itself,” Werner said, speaking at the Reuters Global Energy Summit in New York.

The solar industry was virtually unscathed by the economic downturn until late last year, when funding for all types of projects dried up.

That lack of financing combined with a pullback in solar tax breaks in Spain released a flood of solar panels into the market, driving prices down and hurting producers’ profits.

In April, SunPower reported an unexpected quarterly net loss and slashed its outlook for 2009.

The company has forecast earnings of 25 cents to 50 cents a share for the full year. Werner declined to narrow that range, but said his confidence in the market is increasing.

FINANCING STILL SCARCE

Energy Conversion Devices Inc (ENER) CEO Mark Morelli was more sober in his outlook for the U.S. solar market this year because access to project financing remains scarce and government stimulus funds have yet to kick in.

“Near-term, I think it’s going to be tough,” Morelli said at the Reuters Global Energy Summit in New York.

In May, it reported an 81 percent drop in quarterly profit and declined to provide any outlook.

Also this year, the company said it would slow expansion plans and cut production to bring supplies into line with weakened demand.

“We’re being somewhat guarded on the second half because we were a bit optimistic coming into the new year … We don’t know when the financing will come back; we just hope it will come back.”

ECD makes lightweight, flexible solar laminates for rooftops and buildings that convert sunlight into electricity. The thin film products are made from amorphous silicon and unlike traditional solar panels, do not rely on costly crystalline silicon as their primary raw material.

(Editing by Phil Berlowitz)

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