North Coast Solar Stocks

December 14, 2009

MEMC Electronic Materials: Citi Cuts Target, Estimates On Lower Poly Prices

Filed under: WFR — Tags: , , , , — Jason @ 1:19 pm

By Eric Savitz
barrons.com

Citigroup analyst Timothy Arcuri today trimmed his price target on MEMC Electronic Materials (WFR) to $16, from $20, and cut his EPS estimates to reflect lower spot market pricing for polysilicon. He now sees the poly and silicon wafer posting a 2009 loss of 22 cents a share, worse than his previous forecast of a loss of 5 cents. For 2010, he goes to 44 cents, from 57 cents.

Arcuri keeps his Hold rating on the stock.

WFR today is off 7 cents at $12.50.

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December 9, 2009

IUSD Board Approves Historic Solar Agreement Projected to Save $17 Million

Filed under: WFR — Tags: , , — Jason @ 1:03 am

SunEdison, SPG Solar to establish energy-generating solar power systems at 21 sites

1:03 am EST, Wednesday December 9, 2009

IRVINE, Calif.–(BUSINESS WIRE)–The Irvine Unified School District (IUSD) Board of Education today approved a plan to enter into an agreement with SunEdison, a subsidiary of MEMC Electronic materials (WFR), and SPG Solar to establish energy-generating solar photovoltaic (PV) power systems at twenty-one sites throughout the district. It will be the largest solar deployment for a public school system in the state of California.

The clean, silent renewable energy systems will save the district $17 million in energy expenses over 20 years based on conservative estimates. Under the terms of the power purchase agreement, the Irvine Unified School District will incur no upfront capital costs. SunEdison will finance, build, operate and maintain the solar power systems, with IUSD purchasing energy with long-term predictable pricing.

This unique partnership will also make solar PV part of the district’s curriculum. Students will utilize Internet-based monitoring of the solar PV system to track solar energy production and consumption in real time. In addition, students will learn how solar panels work and how weather impacts energy production.

“We are excited about the opportunity to educate our students with a real world project that conserves both energy and money,” said IUSD Board of Education member Michael Parham. “This enables the district to ‘practice what we preach’ as we lower electricity costs by more than $17 million and reduce greenhouse gas emissions equivalent to taking 12,000 cars off the road each year – a win-win-win for our kids, pocketbooks and planet.”

“We thank SunEdison and SPG Solar for making this a reality,” Parham said. “It is a game-changer in IUSD’s ongoing campaign to conserve, recycle and explore new technologies in the pursuit of sustainability.”

Projected Energy Production and Environmental Savings

The energy agreement approved today will:

* Generate more than 6.6 million kilowatt hours of solar energy in the first year based on the projected 21 sites.
* Generate more than 120 million kilowatt hours of solar energy over 20 years – enough energy to power more than 11,000 average homes for one year.
* Offset a projected 127 million pounds of carbon dioxide over 20 years – the equivalent of removing more than 12,000 cars from the road for one year, based on an average of 12,000 annual miles per vehicle.

According to SunEdison President and Executive VP for MEMC Carlos Domenech, “When you get chances in life to reduce the carbon footprint, reduce costs and help kids and a school district – it is pretty special. We are lucky there are school systems like Irvine that have this kind of vision.”

About SunEdison

SunEdison is North America’s largest solar energy services provider. The company finances, installs and operates distributed power plants using proven photovoltaic technologies, delivering fully managed, predictably priced solar energy services for its commercial, government and utility customers. In 2008, SunEdison delivered more kilowatt hours (kWh) of energy than any other solar services provider in North America. For more information about SunEdison, please visit http://www.sunedison.com

About IUSD

Located in Orange County, Calif., the Irvine Unified School District is comprised of a community of learners, committed to the highest quality educational experience. IUSD educates a diverse population of approximately 27,000 K-12 students in 22 elementary schools, 5 middle schools, 4 comprehensive high schools and one continuation high school. The district’s strategic plan is driven by IUSD’s mission to enable all students to become contributing members of society, empowered with the skills, knowledge, and values necessary to meet the challenges of a changing world. For more, visit http://www.iusd.org.

December 8, 2009

SunEdison and SkyPower Receive Canadian Solar Award

Filed under: WFR — Tags: , , , , , — Jason @ 10:27 pm

Canadian Solar Industries Association Honors First Light Solar Energy Park in Stone Mills, Ontario

10:27 pm EST, Tuesday December 8, 2009

TORONTO, Ontario–(BUSINESS WIRE)–SunEdison, a subsidiary of MEMC Electronic materials (WFR) along with project partner, SkyPower, have been awarded the “Solar PV Project of the Year for Ground Mount” by CanSIA, the leading solar association in Canada. The award was presented for the 9.1-megawatt (MW) First Light Solar Energy Park in Stone Mills, Ontario, the largest solar energy park built to date in Canada. Ontario Deputy Premier and Minister of Energy & Infrastructure, Honourable George Smitherman presented the award.

In presenting the award Minister Smitherman said, “The First Light Solar Energy Park’s grand opening made solar dreams real for a lot of people in the industry – not just in Ontario – but across the country. For being the spark that is without question the very first big bright light of solar in Canada – but certainly not the last, we offer our congratulations.”

The system, covering 90 acres of land, approximately the size of 50 Canadian football fields, began transmitting energy to Hydro One Networks, the largest electricity transmission and distribution company in Ontario, on September 30. SunEdison and SkyPower expect First Light to generate more than 10 million kilowatt hours (kWhs), enough electricity to power approximately 1,000 homes in its first year of operation, the equivalent of taking almost 1,800 cars off the road and removing 8,000 metric tons of carbon from the atmosphere.

Commenting on the award, SunEdison President and Executive VP of MEMC Carlos Domenech said, “We are honored that we have been recognized along with our partner, SkyPower, with such a prestigious award from CanSIA. It is a reflection of SunEdison’s commitment to Canada, and underscores the opportunities for renewable energy made possible in Ontario. SunEdison looks forward to continued development of rooftop and ground mount solar systems throughout the Province, and throughout Canada.”

During construction of First Light, SunEdison and SkyPower worked closely with Ontario’s Ministry of Natural Resources to successfully preserve habitat for the endangered Eastern Loggerhead Shrike. First Light was built on bedrock that would have had limited use for other development, meeting the priority for protecting agricultural lands.

About SunEdison

SunEdison is North America’s largest solar energy services provider. The company finances, installs and operates distributed power plants using proven photovoltaic technologies, delivering fully managed, predictably priced solar energy services for its commercial, government and utility customers. In 2008, SunEdison delivered more kilowatt hours (kWh) of energy than any other solar services provider in North America. For more information about SunEdison, please visit http://www.sunedison.com. SunEdison is a subsidiary of MEMC Electronic Materials.

About SkyPower Corp.

SkyPower is the leading independence renewable energy developer in Canada, and possesses proven expertise in developing, building and managing both large-scale and micro-generation wind and solar power projects. SkyPower has developed a national footprint, with a substantial number of projects at various stages of development across Canada, in select U.S. States, India and Panama representing thousands of mega watts (MW) of potential nameplate capacity. SkyPower continues to help many different jurisdictions meet their increasing demand for cleaner, non-emitting renewable energy solutions. For more information, visit http://www.skypower.com.

November 23, 2009

MEMC Completes Acquisition of SunEdison

Filed under: WFR — Tags: , , , , , — Jason @ 8:00 am

8:00 am EST, Monday November 23, 2009

ST. PETERS, Mo., Nov. 23 /PRNewswire-FirstCall/ — MEMC Electronic Materials, Inc. (WFR), a leading provider of silicon wafers to the semiconductor and solar industries, has completed the acquisition of privately held Sun Edison LLC, a developer of solar power projects and North America’s largest solar energy services provider.

As previously disclosed, the purchase price of $200 million was paid 70% in cash and 30% in MEMC stock, plus certain retention payments, transaction expenses, and the assumption of net debt.

“This acquisition further enhances our positioning in the solar industry,” said Ahmad Chatila, Chief Executive Officer of MEMC. “Renewable, clean solar energy is still in its infancy as a growing global industry. Our role in reducing costs in both the components of solar modules and well as the actual solar plants will help to further accelerate this growth.”

“Our strategy is to drive revenue growth for our wafer business while SunEdison produces a recurring revenue stream from solar generated electricity. At the same time, SunEdison can directly benefit from the technological and cost advances that we are helping to create with continuing improvements in silicon wafer technology. This acquisition is the beginning of an exciting new chapter in the successful 50 year history of MEMC.”

SunEdison is based in Beltsville, Maryland and employs approximately 300 people worldwide. It “simplifies solar” by managing the development, financing, operation and monitoring of solar power plants for commercial customers, including many national retail outlets, government agencies, and utilities. In a typical structure, SunEdison arranges third party, non-recourse financing for the facility and the customer has no upfront capital outlay.

With one of the strongest brands in solar, SunEdison will continue to operate with the SunEdison name, as a subsidiary of MEMC.

Other Events

The Company announced that, in connection with the acquisition of Sun Edison LLC, the Company granted special inducement grants under its 2009 Special Inducement Grant Plan to retain certain SunEdison employees (224_ in total) as employees of MEMC and its newly acquired SunEdison business unit. The Company granted an aggregate of 584,372 restricted stock units, which vest on the first anniversary of the Closing, subject to such employees being employed by MEMC and/or the SunEdison business unit on such date.

The Company also granted an aggregate of 1,644,529 restricted stock units, which are subject to vesting requirements based on both performance and time. The performance requirements are tied to the same metrics as the earnout contemplated by the merger agreement. Assuming the performance requirement is achieved, (i) 34% of such earned grants will vest on the date that MEMC determines to be the issue date following the end of the earnout period; (ii) 33% of such earned grants will vest on December 31, 2011; and (iii) the remaining 33% of such earned grants will vest on December 31, 2012, assuming that the subject employee is employed by MEMC or the SunEdison business unit as of those dates.

The Company’s Board of Directors approved the 2009 Special Inducement Grant Plan based on the employment inducement exemption provided under the NYSE listing standards. As a result, the Plan did not require shareholder approval, and this press release is being issued pursuant to applicable NYSE guidance.

November 15, 2009

Suntech Selects Arizona for First U.S. Manufacturing Plant

Filed under: STP, WFR — Tags: , , , , , , — Jason @ 10:30 pm

Solar Leader Brings Green Manufacturing Jobs from China to the United States

10:30 pm EST, Sunday November 15, 2009

BEIJING, Nov. 15 /PRNewswire-Asia/ — From the U.S. China Green Tech Summit today, Suntech Power Holdings Co., Ltd. (STP), announced that its first U.S. manufacturing plant for the growing North American market would be located in the Greater Phoenix, Arizona area. The plant will have an initial production capacity of 30 megawatts (MW) and is expected to begin production in the third quarter of 2010.

The announcement makes Suntech the first Chinese cleantech leader to bring manufacturing jobs to America. Suntech selected the Greater Phoenix area for its plant because of Arizona’s leadership in research through Arizona State University, and statewide renewable energy policies, particularly its Renewable Energy Standard and distributed generation set-aside, as well as a supportive local business climate represented by the Greater Phoenix Economic Council. The Suntech U.S. plant will employ over 75 full-time employees at launch and may double its staff within the year as the North American market develops.

Initially starting with 30 MW of PV module production capacity, the Suntech plant is configured for growth to respond to the expected expansion of the U.S. solar market in the coming years. The U.S. market had 356MW of solar PV capacity installed during 2008 (source: Photon Magazine, Nov. 2009), and is expected to grow six-fold to more than 2GW by 2012 (source: Solarbuzz LLC, Mar. 2009).

“Bringing manufacturing jobs to the U.S. is part of Suntech’s vision to grow the solar market in every corner of the world,” said Suntech’s Chairman and CEO Dr. Zhengrong Shi. “We are eagerly watching growing markets and see the potential of bringing manufacturing capabilities to other markets where we see the combination of rapid local market growth and manufacturing cost competitiveness.”

Locating the plant close to Suntech’s U.S. customers will reduce the time, costs, and emissions associated with long-distance shipping of Suntech panels. The plant, which will be approximately 80,000 to 100,000 square feet, will allow for long-term growth of manufacturing capabilities to meet increasing American demand for solar power.

“Suntech has been a leader to watch for some time, and its decision to bring manufacturing here to the U.S. is a great sign of the increasingly important collaboration between Chinese and American leaders in the renewable energy industry, as well as the potential for growth of green jobs in countries that implement smart, supportive policies,” said Dan Kammen, Professor in the Energy and Resources Group and Director of the Renewable and Appropriate Energy Laboratory at the University of California, Berkeley.

Dr. Shi continued, “This is the first step in what I see as a long-term, strategic investment in the North American market. Over the last two years we have grown our U.S. team to over 60 employees. As a result of that effort, we have developed a network of over 200 solar dealers and integrators installing Suntech products and are actively involved with a number of large-scale solar project developers serving the utility market. We also have developed strong partnerships with U.S. companies such as MEMC (WFR) of Pasadena, Texas, our largest supplier of silicon wafers used in our modules. The leadership shown by the US government in advancing renewable energy will only improve the environment for further investments in the coming years.”

Suntech plans to make a final decision on the specific location of the plant in the coming weeks.

November 13, 2009

Solar power startup Ausra looks to sell itself

Filed under: FSLR, PCG, SOL, WFR — Tags: , , , , , — Jason @ 9:40 pm

Fri Nov 13, 2009 9:40pm EST

* Potential buyers are international conglomerates

* Deals in “aggressive level” of discussion

* Solar thermal start-up raised $130 mln in venture capital

By Laura Isensee

LOS ANGELES, Nov 13 (Reuters) – Kleiner Perkins and Khosla Ventures-backed solar thermal start-up Ausra Inc is in talks to sell itself with three potential buyers, two sources familiar with the company told Reuters on Friday.

The buyers could take a majority stake or snag the whole company and the discussions are at a “very aggressive level”, said one source familiar with the company, who was not authorized to discuss the matter publicly.

Both sources said the interested companies were global conglomerates in the power generation business but declined to name them. The companies already have various power products, such as steam and gas turbines, and are committed to renewable energy. One interested party has engaged with Ausra previously, one source said.

Ausra declined to comment.

A sale of the high profile Silicon Valley start-up that has raised $130 million in venture capital would add to a string of recent deals and growing consolidation in the solar power industry.

Chinese solar wafer manufacturer ReneSola Ltd (SOL) plans to buy Dynamic Green Energy Ltd while silicon maker MEMC Electronic Materials Inc (WFR) plans to acquire privately-held SunEdison, which installs, maintains and finances commercial solar systems.

Privately held Ausra, which is based in Mountain View, California, launched as a solar thermal developer in 2006, when solar power and other clean technology were luring venture capitalists.

Two years ago the company landed a power purchasing agreement with California utility PG&E, a unit of PG&E Corp (PCG) for a 117 megawatt solar thermal plant. Solar thermal plants use the sun’s rays to heat liquid to create steam, which drives turbines and generates electricity.

Earlier this year, the company switched tracks, saying it would move away from developing projects and focus on supplying large-scale solar steam generators.

This month Ausra said that it canceled its agreement with PG&E and sold the project’s land to the largest U.S. solar power company, thin film photovoltaic First Solar Inc (FSLR).

Ausra also has deals in Jordan and Australia and other investors include Starfish Ventures and KERN Partners.

One source familiar with the company said that “extensive work” has been done at various stages of completion with the interested buyers.

“We’re talking about meetings with dozens of people involved,” said the person, who also was not authorized to speak publicly about the discussions.

(Reporting by Laura Isensee; Editing Bernard Orr)

November 2, 2009

Q-Cells ends LDK supply agreement, claims guarantee

Filed under: FSLR, LDK, WFR — Tags: , , , , , — Jason @ 2:51 pm

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.

(more…)

October 22, 2009

MEMC To Acquire SunEdison; Posts Q3 Loss; Stock Falls

Filed under: AMAT, STP, WFR — Tags: , , , , , , , — Jason @ 8:14 pm

By Eric Savitz
barrons.com

In a major diversification move, polysilicon producer MEMC Electronic Materials (WFR) this afternoon said it will acquire SunEdison for at least $200 million in cash and stock.

SunEdison, which developers, finances, owns and operates solar projects, has about 300 employees. Investors in the company include Goldman Sachs, MissionPoint Capital Partners, Black River Asset Management, Greylock Partners, HSH Nordbank and Applied Materials (AMAT).

Terms call for MEMC to pay the $200 million purchase price 70% in cash and 30% in stock; the deal also includes a provision for an earn out of up to $89 million, based on certain performance targets. The company is also paying $17 million in retention payments to certain SunEdison employees, plus up to another $34 million in stock, subject to performance criteria and vesting. MEMC will also assume SunEdison’s net debt.

MEMC said the deal should be accretive to earnings by the second half of 2010.

Meanwhile, MEMC posted Q3 revenue of $310 million, ahead of the Street consensus of $301.6 million. The company suffered a loss in the quarter of $64.6 million, or 29 cents a share, due in part to a $39.7 million restructuring and impairment charge, a $19.2 million tax-related item and $6.3 million hit for a reduction inthe value of the company’s Suntech (STP) warrants.

For Q4, the company sees revenue of $310 million to $350 million; the midpont of the range at $330 million is below the previous Street consensus at $341.6 million.

In late trading, WFR fell 58 cents, or 3.8%, to $14.85.

Outlook from solar companies disappoints investors

Thu Oct 22, 2009 7:51pm EDT

* SunPower disappoints with lowered outlook

* Akeena takes advantage of lower panel costs

* MEMC to acquire commercial solar financier SunEdison

By Poornima Gupta and Laura Isensee

SAN FRANCISCO, Oct 22 (Reuters) – U.S. solar companies SunPower Corp (SPWRA, SPWRB) and Akeena Solar Inc (AKNS) on Thursday posted results that topped Wall Street estimates, but offered little hope the market for the renewable energy source would rebound this year.

The two companies said the solar sector was seeing a slow improvement, but also admitted the industry has yet to overcome the oversupply problems that have driven prices for panels down by about 50 percent in the past 12 months.

“The industry is seeing a much more balanced picture in demand and supply,” said SunPower’s chief executive, Tom Werner, in an interview.

SunPower, which posted lower net income and trimmed its full-year earnings forecast to the low end of its previous range, said the financing environment for solar projects was improving, and the average selling price fell less than 10 percent during the third quarter.

The company’s forecast narrowed in part because some of its large-scale projects have moved into the early part of 2010, Werner said in an interview.

“The good news there is that we’re still sold out and we go in with a very strong pipeline into 2010,” Werner said, adding that the company is “better positioned” for the first quarter of 2010 than it was for the first quarter in 2009.

(more…)

MEMC Reports Third Quarter Results

Filed under: WFR — Tags: , , , , , , , — Jason @ 5:22 pm

5:22 pm EDT, Thursday October 22, 2009

ST. PETERS, Mo., Oct. 22 /PRNewswire-FirstCall/ — MEMC Electronic Materials, Inc. (WFR) today reported financial results for the third quarter ended September 30, 2009.

Summary:

* Net sales of $310.0 million
* Gross profit of $20.5 million (6.6% of net sales)
* Loss of $0.29 per share including special charges of $44.9 million, net of tax
* Cash and investment balances of $1.2 billion
* Announced acquisition of solar developer SunEdison

The company reported third quarter 2009 net sales of $310.0 million, which represents an increase of 9.6% from second quarter 2009 net sales of $282.9 million, and a decrease of 43.2% from third quarter 2008 net sales of $546.0 million. The sequential increase in sales was primarily the result of significantly higher wafer volumes for both semiconductor and solar applications, partially offset by price reductions in wafers for solar applications.

Gross profit in the quarter was $20.5 million, or 6.6% of net sales, compared to $34.9 million, or 12.3% of net sales, in the 2009 second quarter and $269.7 million, or 49.4% of net sales, in the 2008 third quarter. The sequential decrease in gross profit was primarily the result of price reductions in wafers for solar applications and higher costs due to the previously announced disruption at the company’s Pasadena, Texas facility.

The company reported an operating loss of $66.7 million during the quarter, compared to an operating loss of $23.1 million in the 2009 second quarter and operating income of $227.5 million in the 2008 third quarter. Third quarter 2009 operating expenses of $87.2 million, or 28.1% of sales, include restructuring and impairment charges of $39.7 million relating to the previously announced plant consolidation, and $4.5 million of cost associated with the startup of the company’s Ipoh, Malaysia facility. This compared to $58.0 million, or 20.5% of sales, in the 2009 second quarter, which included an accrual of $8.8 million associated with an adverse ruling in a lawsuit, a charge of $5.6 million relating to restructuring in the company’s Korean facility and $3.0 million of costs associated with the startup of the Ipoh facility.

MEMC’s net loss for the third quarter was $64.6 million, or $0.29 per share, including the restructuring and impairment charges discussed above, additional tax expense of $19.2 million for an unrecognized tax benefit and a negative impact relating to the decrease in the value of the Suntech warrants of $6.3 million.

During the third quarter, the company generated operating cash flow of $0.2 million, compared to $16.4 million in the 2009 second quarter. Capital expenditures for the third quarter totaled $53.1 million. MEMC ended the third quarter with cash and investments of $1.2 billion, and does not maintain any significant debt.

(more…)

MEMC to Expand Scope of Solar Business with Acquisition of SunEdison

Filed under: WFR — Tags: , , , , , — Jason @ 5:19 pm

5:19 pm EDT, Thursday October 22, 2009

ST. PETERS, Mo. and BELTSVILLE, Md., Oct. 22 /PRNewswire-FirstCall/ — MEMC Electronic Materials, Inc. (WFR), a leading provider of silicon wafers to the semiconductor and solar industries, has reached a definitive agreement to acquire privately held SunEdison LLC, a developer of solar power projects and North America’s largest solar energy services provider. The acquisition is expected to close by the end of 2009, subject to customary closing conditions and receipt of regulatory approvals.

The agreement calls for $200 million to be paid at closing to SunEdison security holders, which will be paid 70% in cash and 30% in MEMC stock. The agreement also includes an earn-out provision, should SunEdison meet certain performance targets in 2010, of up to an additional $89 million, consisting of cash and stock. In addition, the agreement calls for employee retention payments of $17 million in cash at closing, plus up to $34 million in stock which is subject to SunEdison meeting certain performance criteria and time vesting, the payment of certain transaction expenses and the assumption of net debt.

“This acquisition will provide a third engine of growth for MEMC,” said Ahmad Chatila, Chief Executive Officer of MEMC. “MEMC will now participate in the actual development of solar power plants and commercialization of clean energy, in addition to supplying the solar and semiconductor industries with our traditional silicon wafer products.”

“SunEdison has successfully built about 300 solar power plants representing approximately 80 MW of generating capacity on the rooftops and grounds of customers in the United States, Canada and Europe,” said Carlos Domenech, Chief Operating Officer of SunEdison. “Our business is highly scalable and will be able to grow substantially, capitalizing on our more than 1.5 GW of pipeline, backlog and leads with a financially strong, technically sophisticated partner like MEMC, which also has a competitive cost structure in upstream materials. This combination will greatly accelerate our goal of making solar energy cost competitive with grid prices.”

SunEdison is based in Beltsville, Maryland and employs approximately 300 people worldwide. It “simplifies solar” by managing the development, financing, operation and monitoring of solar power plants for commercial customers, including many national retail outlets, government agencies, and utilities. In a typical structure SunEdison arranges third-party, non-recourse financing for the facility and the customer has no up-front capital outlay.

With one of the strongest brands in solar, SunEdison will continue to operate with the SunEdison name, as a subsidiary of MEMC. Carlos Domenech will continue to lead SunEdison. After the acquisition is complete, he is expected to be named as Executive Vice President of MEMC and President of SunEdison, reporting to Ahmad Chatila.

“By making solar power more affordable and easy to obtain, we expect to tap into a large pent-up demand,” added Mr. Chatila. “We believe this strategy will drive revenue growth for our wafer business while producing a recurring revenue stream from solar-generated electricity. This will also allow us to directly benefit from the technological and cost advances that we are helping to create in the solar industry.”

Mr. Chatila concluded, “In short, we believe MEMC and SunEdison make a powerful combination, and we are excited about having their talented employees around the world join the MEMC team.”

MEMC expects the acquisition to be accretive to earnings, subject to purchase accounting adjustments, by the second half of 2010.

Conference Call

MEMC will host a conference call today, October 22, at 5:30 p.m. ET to discuss the company’s third quarter financial results, as well as the agreement to acquire SunEdison. A live webcast will be available on the company’s web site at http://www.memc.com. Please go to the web site at least fifteen minutes prior to the call to register, download and install any necessary audio software.

A replay of the conference call will be available from 7:30 p.m. ET today until 11:59 p.m. ET on October 29. To access the replay, please dial (320) 365-3844 at any time during that period, using pass code 118827. A replay will also be available until 11:59 p.m. ET on October 29 on the company’s web site at http://www.memc.com.

About SunEdison

SunEdison is North America’s largest solar energy services provider. The company finances, installs and operates distributed power plants using proven photovoltaic technologies, delivering fully managed, predictably priced solar energy services for its commercial, government and utility customers. In 2008, SunEdison delivered more kilowatt hours (kWh) of energy than any other solar services provider in North America. For more information about SunEdison, please visit http://www.sunedison.com.

October 13, 2009

Solar Stocks Slide On Worries Over German Subsidies

Filed under: CSIQ, ENER, ESLR, FSLR, SPWR, STP, WFR, YGE — Tags: , , , , , — Jason @ 2:23 pm

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.

September 28, 2009

Applied Materials upgraded on coming SunFab orders

Filed under: AMAT, WFR — Tags: , , , , , , — Jason @ 12:36 pm

Applied Materials upgraded on coming orders for solar production equipment, MEMC downgraded

Monday September 28, 2009, 12:36 pm EDT

PHILADELPHIA (AP) — Shares of Applied Materials Inc. (AMAT) advanced on Monday after a Citigroup analyst upgraded his recommendation on the stock based on “significant” upcoming orders for its solar modules production equipment.

Analyst Timothy Arcuri raised Applied Materials, a maker of chip production equipment, to “Buy” from “Hold” and added the stock to Citi’s top picks list for investors, replacing MEMC Electronic Materials Inc (WFR). He also raised his Applied Materials target price by $2 to $17 and bumped up his 2010 earnings estimate by 4 cents to 46 cents per share.

Wall Street analysts expect 2010 earnings of 33 cents per share, according to a poll by Thomson Reuters.

Arcuri said checks at the Hamburg solar show led him to believe that Applied Materials is about to sign a “significant” second wave of orders for its SunFab solar production equipment, including four new lines of about 300 megawatts in India.

While the analyst noted that SunFab’s long-term success isn’t certain given that module prices are falling in the market, the company is adding new customers, cutting costs, lined up about $1 billion in savings and has a renewed focus on regaining market share. These factors are enough to drive the stock higher, Arcuri said in a research note.

As the largest solar equipment provider, Applied Materials also will benefit from market growth in 2010 and sidestep the problem of weakened pricing.

“As these catalysts play out, the Street will no longer be able to ignore the stock,” Arcuri said.

Shares of Santa Clara, Calif.-based Applied Materials rose 42 cents, or 3.2 percent, to $13.52, in midday trading.

While Applied Materials got kudos, the analyst was bearish on silicon wafer maker MEMC, which he downgraded to “Hold” from “Buy.” He cut his target price to $20 from $24. He said the company’s polysilicon production problems still are unresolved, thereby risking missing seasonal demand and could lead to its missing this quarter’s financial outlook.

Earlier this month, MEMC reduced its third-quarter revenue forecast due to a disruption at a polysilicon Texas plant caused by equipment failure. The failed equipment was replaced but new problems delayed production again.

Arcuri slashed his 2010 earnings estimate for MEMC to 73 cents per share from $1.33, and to $1.56 from $2.82 in 2011. Analysts expect the company to post a profit of 98 cents per share in 2010, and $1.86 per share in 2011.

Shares of St. Peters, Mo.-based MEMC dropped 55 cents, or 3.2 percent, to $16.75.

September 27, 2009

Solar analyst sees supply, other challenges-Barron’s

Filed under: FSLR, SPWR, STP, TSL, WFR, YGE — Tags: , , , , , , — Jason @ 5:32 pm

Sun Sep 27, 2009 5:32pm EDT

NEW YORK, Sept 27 (Reuters) – Hapoalim Securities analyst Gordon Johnson, who accurately predicted a fall in solar stocks last year, said solar companies face excess supply and other challenges through 2010, according to Barron’s on Sunday.

The photovoltaic sector will see a supply of 7.1 gigawatts this year and about 10.8 GW the next, compared with demand of roughly 4.3 GW this year and some 6 GW in 2010, Johnson told the weekly business newspaper.

Manufacturers of crystalline polysilicon, which is used in some solar cells, could also face lower demand, even as plants that take three years to build come online, Johnson told Barron’s in an interview.

Johnson told the paper that polysilicon prices, now $50 per kilogram to $60 per kilogram, are likely to fall and might dip below the break-even level — $25 per kg to $28 per kg — which is bad news for producers like MEMC Electronic Materials (WFR) and Wacker Chemie.

Johnson has a price target of $9 on MEMC. It closed at $17.29 on Friday on the New York Stock Exchange.

Johnson told Barron’s that solar companies have seen their stocks rise of late on expectations of demand from China this year and the next, but those hopes were overblown.

He downgraded one such company, China-based Suntech Power Holdings Co Ltd (STP), to “sell” this year because of accounting and other risks, according to Barron’s.

Suntech faces certain cost disadvantages compared with some rivals as Yingli Green Energy Holding Co Ltd (YGE) and Trina Solar (TSL), Johnson said.

(more…)

September 16, 2009

WFR Climbs On Takeover Chatter

Filed under: WFR — Tags: , , — Jason @ 3:35 pm

By Eric Savitz
barrons.com

MEMC Electronic Materials (WFR) shares are trading higher today on vague rumors that the company might be a takeover target. The rumors have been picked up by TheFlyOnTheWall.com and Briefing.com, among other places; but there doesn’t seem to be much substance to the chatter. I’d note that WFR is a frequent subject of speculation, sometimes more specific than others: back in March there was talk that the company might be acquired by BASF. The Street was rightly skeptical that time, and of course, no deal ever materialized. I can’t see why you should have any more confidence in the buzz this time.

WFR today is up $1.17, or 6.7%, to $18.56.

September 8, 2009

MEMC Provides Business Update; Announces Consolidation of Wafer Manufacturing Operations

Filed under: WFR — Tags: , , , , , , , — Jason @ 9:00 am

Tuesday September 8, 2009, 9:00 am EDT

ST. PETERS, Mo., Sept. 8 /PRNewswire-FirstCall/ — MEMC Electronic Materials, Inc. (WFR) today provided an update on guidance for the current quarter in light of recent events, and also announced that it will cease production of silicon crystal ingots and wafers at facilities in Sherman, Texas and St. Peters, Missouri. These closings will occur in stages during 2010 and early 2011, as production shifts to other locations.

Business Update. The company disclosed that it experienced a disruption in production at its polysilicon facility in Pasadena, Texas due to an equipment failure on August 7, 2009, requiring a large portion of the facility to be shut-down. Initial reports indicated that the company’s silane and polysilicon inventory levels would cover the lost output caused by this disruption until normal production levels were achieved. Although the failed equipment has been replaced, subsequent rebuild and restart difficulties have delayed the resumption of normal operations at this facility. The company expects to be back to normal production levels before the end of September. The lost production and related costs are expected to negatively affect the company’s revenue and margins in the third quarter of 2009.

The company now anticipates revenue for the third quarter of 2009 to be approximately $285-$315 million, with gross margins expected to be in the mid to high single digits. This compares to the company’s second quarter of 2009 revenue of $282.9 with a gross margin of 12.3% and the previously announced third quarter targets of $300-$350 million in revenue with gross margin being up slightly from the second quarter level.

Plant Consolidations. The company also announced the planned closings of the Sherman, Texas plant and portions of the St. Peters, Missouri plant. Chief Executive Officer Ahmad Chatila stated, “We must continue to aggressively drive all unnecessary costs out of the business during these extraordinary times. We will be shifting this high-volume production closer to a number of our customers, who are located in lower cost regions. This will allow us to reduce manufacturing costs and to serve our customers effectively, with the right cost-competitive capacity – in the right places – to meet their needs.”

“We recognize that this decision will adversely affect many of our employees at these locations, and consequently these steps were not taken lightly or planned for any sooner than absolutely necessary to advance our strategic goals,” continued Chatila. “We are announcing our plans now to give affected employees a significant transition period, and we will be putting severance and assistance programs in place for those employees who will not continue with MEMC,” Chatila stated.

The actions at the two sites are expected to affect approximately 540 employees in the U.S. A small number of these affected employees will be offered positions at other MEMC locations. Severance packages and other benefits and assistance, including supplemental COBRA payments, one year of group medical and dental benefits, and supplemental educational assistance and retraining opportunities will be provided to those employees not taking positions at other facilities.

As production is transferred to other facilities, silicon wafering operations in St. Peters are expected to cease by the end of the second quarter of 2010. Epi and crystal operations at that location are expected to cease by the end of the first quarter of 2011. The MEMC corporate headquarters, as well as research and development and advanced Silicon on Insulator (SOI) manufacturing, are expected to continue at the St. Peters location.

The Sherman facility produces silicon crystal ingots and wafers. Production in Sherman will be phased out by the first quarter of 2011. The company intends to then sell the facility.

The company expects that the severance benefits provided to those employees who will be terminated will result in charges related to the terminations of approximately $18 million. The company expects to record $17 million of these charges in the third quarter of 2009 and to make the related severance payments at the time of the final production date at each facility through the second quarter of 2011. The company also anticipates charges of approximately $55-60 million for contract terminations and other related move costs associated with the closings. The company expects to expense these charges as incurred starting in the fourth quarter of 2009 until the final production date at the respective facilities. In total, the company expects to incur approximately $73-78 million in cash costs associated with these announcements. The company will complete the asset impairment analysis in connection with filing its third quarter Form 10-Q that could result in additional non-cash charges. The company expects that the facility closings will result in an annualized savings beginning in third quarter of 2010 of approximately $10 million, rising to approximately $55 million of annualized savings beginning in the second quarter of 2011.

Certain matters discussed in this news release are forward-looking statements, including that third quarter revenue is targeted to be approximately $285-315 million, with gross margins expected to be in the mid to high single digits; that the company expects to be back to normal production levels at its Pasadena facility before the end of September 2009; that the company plans to cease wafer and ingot production at facilities in Sherman, Texas and St. Peters, Missouri in stages during 2010 and early 2011; that the company expects to incur charges related to the terminations of approximately $18 million, including recording $17 million of these charges in the third quarter of 2009 and to make the related severance payments at the time of the final production date through the second quarter of 2011; that the company anticipates charges of approximately $55-60 million for contract terminations and other related move costs associated with the closings; that the company expects to incur approximately $73-78 million in cash costs associated with these announcements; that the impairment analysis could result in additional non-cash charges; and that the company expects that the facility closings will result in an annualized savings beginning in third quarter of 2010 of approximately $10 million, rising to approximately $55 million of annualized savings beginning in the second quarter of 2011. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include market demand for semiconductors and silicon wafers, as well as polysilicon; changes in the pricing environment for both silicon wafers and polysilicon; assumptions underlying management’s financial estimates, both for the third quarter of 2009 and the expected restructuring costs and potential annualized savings from these site consolidations; any other charges we might incur to reduce manufacturing capacity or headcount; utilization of our manufacturing capacity; delays in capacity relocation or expansion; changes in the composition of worldwide taxable income; general economic conditions, including the ability of our customers to pay their debts as they become due; inventory levels of our customers; supply chain difficulties or problems; interruption of production; good working order of our manufacturing facilities; our ability to further reduce manufacturing and operating costs; the terms of any potential future amendments to our long-term agreements with our solar wafer customers; completion and sale of the power plant being constructed by our new solar joint venture; outcome of pending and future litigation matters; customer acceptance of our new products; actions by competitors, customers and suppliers; changes in product specifications and manufacturing processes; changes in financial market conditions; the impact of competitive products and technologies; changes in interest and currency exchange rates and other risks described in the company’s filings with the Securities and Exchange Commission. These forward-looking statements represent the company’s judgment as of the date of this release. The company disclaims, however, any intent or obligation to update these forward-looking statements.

August 27, 2009

Ban on scrap polysilicon to boost China solar sector

Filed under: LDK, SOL, WFR, YGE — Tags: , , , , , — Jason @ 5:40 am

Thu Aug 27, 2009 5:40am EDT

By Leonora Walet, Asia Green Investment Correspondent

HONG KONG, Aug 27 (Reuters) – A Chinese ban on imports of a waste material used for solar wafers may be bad news for foreign competitors but it is a big boost to China’s solar sector.

Scrap polysilicon, which can be reused to make solar wafers, is low-grade silicon that fails to meet the grade for chips found in most electronics.

Beginning this month, China stopped accepting scrap polysilicon to comply with environmental regulations.

The ban threatens the income of Chinese scrap polysilicon traders and limits the market for companies that sell to them, such as top contract chipmaker TSMC. It is particularly harsh for small and new domestic solar players who rely on the cheap material to make wafers and panels.

For China’s polysilicon companies, including GCL-Poly Energy Holdings and LDK Solar (LDK), the ban is an opportunity to expand business. For foreign rivals South Korean OCI Co Ltd, MEMC Electronic Materials Inc (WFR) or Japan’s Tokuyama Corp the ban is a potential threat.

China produces over 60 percent of the world’s solar panels, and is among the heaviest users of pure polysilicon and the scrap variety. Scrap polysilicon accounts for up to 30 percent of silicon fed into some of the solar wafers and panels in China.

“In a way, the ruling was designed to protect (China’s) very young polysilicon industry,” said KK Chan, chief executive of private equity firm Nature Elements Capital. “The sector needs all the help it can get given a supply glut of the material.”

The ban comes at a time when Chinese polysilicon companies are ramping up production, despite an oversupply of the key solar component.

GCL-Poly, which acquired $3.4 billion worth of solar assets in June, is on track to produce about 3,000 tonnes of polysilicon by year end. LDK Solar aims to produce 5,000 tonnes by 2010.

Yingli Green Energy Holding Co (YGE), ReneSola (SOL) and Tongwei Co should benefit.

After the credit crunch dried up funding for solar projects, the sector was hit by a massive oversupply of polysilicon. Prices fell to $69 per kilogram from its peak of $400 in 2008.

ENVIRONMENTAL FACTOR

China’s Environmental Protection Ministry said it imposed the ban because the heavy chemicals that come in contact with scrap polysilicon when reused to make solar wafers and panels produce waste that could harm the environment.

The ministry said in a notice posted on its website last month that the regulation was imposed in line with China’s solid waste pollution laws.

A ministry spokesman declined to comment.

“This is positive for China’s polysilicon sector, and the environment,” said GCL-Poly president Hunter Jiang.

The new rule is slowly having a positive impact for local makers of the solar component. Spot prices of polysilicon in China rose to $72 per kg in August from $67 in July weeks after the rule was enforced, said New Energy Finance analyst Julia Wu.

“The segment most likely affected by the policy are local panel and wafer makers, especially the smaller ones,” Wu said.

Established Chinese solar wafer companies are least affected.

“It should not have an impact, given there is sufficient supply of polysilicon in the market,” said Renesola chief finanical officer Charles Bai.

(Additional reporting by David Stanway in Beijing and Suilee Wee in Hong Kong; Editing by Chris Lewis)

August 25, 2009

Court partly dismisses MEMC motions against Conergy

Filed under: WFR — Tags: , , , , — Jason @ 9:34 am

Tue Aug 25, 2009 9:34am EDT

FRANKFURT, Aug 25 (Reuters) – A New York court has partly denied motions by polysilicon maker MEMC (WFR) against Conergy, a small victory for the German solar group in the two companies’ ongoing legal battle.

The move relates to Conergy’s efforts to declare invalid a wafer supply contract it had agreed with MEMC two years ago.

Shares in Conergy were up 17.2 percent at 1229 GMT, while Frankfurt’s technology index was 0.6 percent lower.

“(This is) slightly positive as the company’s future will mainly depend on the outcome of the trial but experts don’t expect a quick ruling,” a local trader said.

Under the contract, which was signed in late 2007, MEMC supplies solar wafers to Conergy over a 10-year period, with pre-determined pricing, on a take-or-pay basis starting in the third quarter of 2008.

Under a take-or-pay contract, a buyer agrees to either take any product that is offered or pay a specified amount as compensation if it does not take the product.

Analysts have said terms of the contract were unfavourable, such as annual price decreases that are slower than the decline of market prices, resulting in above-market costs for Conergy.

In April, Conergy sought to have a New York City court declare the contract invalid after talks with MEMC to renegotiate the terms of the contract had failed.

In the complaint, Conergy said it wanted the take or pay provision of the contract to be made void and unenforceable, pointing to “anti-competitive contractual provisions”.

MEMC at the end of July moved to dismiss Conergy’s claim regarding the contract’s anti-competitive provisions, the U.S. District Court for the Southern District of New York wrote in a statement obtained by Reuters on Tuesday.

“For now, Conergy has made sufficient factual allegations that it was a potential competitor at the time that it entered into the Agreement with MEMC, thereby rendering its claims against defendants (MEMC) plausible,” the court said, according to the statement.

Conergy declined to comment. (Reporting by Christoph Steitz; Editing by Jon Loades-Carter)

August 21, 2009

Jefferies Turns Cautious; Downgrades Many Stocks

Filed under: ASTI, CSUN, ENER, ESLR, FSLR, SOLF, SPWR, STP, WFR — Tags: , , , , — Jason @ 9:31 am

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.

Jefferies downgrades 8 solar companies on pricing, other concerns

Filed under: ASTI, CSUN, ENER, ESLR, FSLR, SOLF, SPWR, STP, WFR — Tags: , , , , — Jason @ 8:47 am

Friday August 21, 2009, 8:47 am EDT

HOUSTON (AP) — Jefferies & Co. lowered its ratings on eight solar companies Friday, citing numerous risks that could play out in the coming months, including a continuation of falling prices.

In reports to clients, Jefferies noted that a continued downward spiral in pricing, while accompanied by lower production costs, may lead to weaker-than-expected estimates for 2010 and concerns about value destruction in the solar sector.

“Liberal Chinese lending practices encourage overproduction and capacity expansions in a market that needs rationalization, in our view,” Jefferies analyst Paul Clegg said.

Evergreen Solar Inc. (ESLR) was downgraded to “Underperform” from “Buy.” Jefferies also lowered its price target to $1 from $3. Jefferies said Evergreen’s low silicon usage advantage has been obscured by high manufacturing costs and pricey silicon contracts.

First Solar Inc. (FSLR) was downgraded to “Hold” from “Buy.” Jefferies also lowered its price target to $130 from $200. It noted, however, that it expects First Solar’s cost structure to remain the lowest in the industry even if silicon prices continue to decline.

Solarfun Power Holdings Co. (SOLF) was downgraded to “Underperform” from “Hold” and the price target was cut to $4 from $6.

Energy Conversion Devices Inc. (ENER) was downgraded to “Underperform” from “Hold” and the firm set a price target of $8. Jefferies noted Energy Conversion has a unique product and market niche, but analysts remain concerned about weak demand.

Ascent Solar Technologies Inc. (ASTI) was downgraded to “Underperform” from “Hold.” Jefferies’ said its $4 price target reflects increased investor risk tolerance.

China Sunenergy Co. Ltd. (CSUN) was downgraded to “Underperform” from “Hold” and trimmed its price target to $3.50 from $4. “Despite strong cell technology and a stable liquidity position, we believe CSUN’s strategic position in only one segment of the value chain could become a more notable disadvantage in an increasingly competitive environment,” Jefferies noted.

SunPower Corp. (SPWRA, SPWRB) was downgraded to “Hold” from “Buy” and its price target was lowered to $30 from $35. Jefferies said SunPower’s diverse and flexible business model bodes well for its market-share prospects in a recovery.

Suntech Power Holdings (STP) was downgraded to “Underperform” from “Hold” and its price target was trimmed to $12 from $14. “STP is positioned to generate rapid growth in key (markets) and to remain a leader on cost and quality,” Jefferies said.

In another report, Jefferies maintained its “Buy” rating on MEMC Electronic Materials (WFR). The company’s “very strong balance sheet” positions it well “as a survivor and potential consolidator,” analysts said.

August 13, 2009

Solar: More Trouble Looms Ahead, Barclays Warns

Filed under: CSIQ, FSLR, JASO, LDK, SOL, SPWR, STP, WFR, YGE — Tags: , , , , , — Jason @ 11:22 am

Posted by Eric Savitz
barrons.com

The troubles for the solar sector are far from over, Barclays Capital analyst Vishal Shah warned this morning.

Formerly bullish on the group as a whole, Shah today reduced his sector rating on solar to Neutral. Shah says the Q2 weakness in solar company results represents a “secular, not seasonal decline.”

Pricing pressure, he contends, is intensifying. Shah says checks find Q4 module ASPs from Chinese companies could drop to $1.80/watt, worse than the $2/watt he had previously been expecting. “Given the overly optimistic demand outlook of most Chinese solar players and expectations of continued production ramps, we see additional downside risk to module pricing exiting 2009,” he adds. “More importantly, we expect 2010 module ASPs to decline by 25%-30%.”

At the same time, Shah warns that the supply/demand outlook is deteriorating, rather than improving. “We expect U.S. demand to pick-up at a slower pace relative to prior expectations and see potential downside risk to inflated demand expectations in China,” he writes. “Moreover, our updated supply outlook suggests that industry over-supply could persist in [the 2010 second half] until production capacity reductions occur at a rapid pace across the industry.”

For the Chinese solar stocks, he warns, earnings risk is to the downside. “Market share gains and not profitability is the motive for most Chinese solar companies – given the inflated opex/interest cost structures, operating break-even levels of companies continue to increase and as such we expect companies to continue to produce even as overall profitability levels deteriorate.” As for the U.S. solar players, he says the outlook is “mixed at best,” given a pick-up which he thinks will be slower than expected.

Finally, raising a potentially huge problem for the solar industry, he wonders whether the current German feed-in tariff level is sustainable, given significant volume growth in 2009 and the potential for further acceleration in 2010, and the impact of the trend on rate-payers in the difficult economic environment. He adds that significant module price declines and attractive project economics “may prompt policy makers to reconsider generous FIT levels.”

Shah’s comments follow earnings disappointments yesterday from JA Solar (JASO), ReneSola (SOL) and LDK Solar (LDK), The reports spurred a number of rating changes this morning:

* Shah cut JASO to Equal Weight from Overweight, trimming his price target to $4, from $5.
* On SOL, there was a split decision. Piper Jaffray analyst Jesse Pichel cut his rating to Underweight from Neutral, with a new price target of $4, down from $6.50. But Creidit Suisse analyst Satya Kumar upgraded the stock to Outperform from Neutral, with a target price of $7.50, up from $3.80.

In today’s trading:

* JA Solar is down 20 cents, or 4.5%, to $4.27.
* LDK Solar is down $1.66, or 14.8%, to $9.55.
* ReneSola is up 22 cents, or 4.1%, to $5.58.
* SunPower (SPWRA, SPWRB) is off 38 cents, or 1.3%, to $28.38.
* Suntech (STP) is down 67 cents, or 3.7%, to $17.68.
* First Solar (FSLR) is up $2.15, or 1.5%, to $147.14.
* MEMC Electronic Materials (WFR) is up 9 cents, or 0.5%, to $16.89.
* Canadian Solar (CSIQ) is off 22 cents, or 1.2%, to $18.12.
* Yingli Green Energy (YGE) is down $1.08, or 8%, to $12.38.

August 3, 2009

MEMC to appeal jury decision in BP Solar lawsuit

Filed under: WFR — Tags: , , , , — Jason @ 11:06 am

MEMC Electronics to appeal jury decision that awards BP Solar $8.8M in supply agreement suit

Monday August 3, 2009, 11:06 am EDT

NEW YORK (AP) — MEMC Electronic Materials Inc. (WFR), a maker of silicon wafers, on Monday said it intends to appeal the jury’s decision that returned a verdict in favor of BP Solar International, in a lawsuit over a supply agreement between the two companies.

The verdict awards damages of $8.8 million to BP Solar, the company said.

In April BP Solar sued MEMC, alleging non-delivery of polysilicon powder under three-year supply agreement that MEMC said has never existed. BP claimed damages of up to $140 million.

Polysilicon is a key raw material used in the production of solar cells.

Shares of MEMC rose 50 cents, or 2.8 percent, to $18.12.

July 30, 2009

Low Prices Melt Profit For Solar

Filed under: FSLR, LDK, SPWR, STP, WFR, YGE — Tags: , , , , , — Jason @ 6:42 pm

Donna Howell
Thursday July 30, 2009, 6:42 pm EDT

Falling solar prices are pinching most solar firms now, but could end up spurring more use of solar power in the near future.

Prices for crystalline-silicon solar panels, or modules — the most common type of solar panel — have plunged on the heels of a drop in prices of the main material used to make them, polysilicon. Both declines stem from a solar module supply glut tied to the financial crisis, which quashed project financing, and a harsh winter in Europe, which hampered installations.

“Module prices have been dropping since the beginning of this year,” said Henning Wicht, principal photovoltaics analyst at research firm iSuppli. “There’s a huge oversupply coming for modules, and next year for polysilicon.”

The trend in general isn’t good for solar firms. The trick is how they can profit while surviving a broad, deepening price war, which at the end will likely spark renewed solar demand.

Costs Not Falling As Fast

The trend “squeezes margins on (solar) companies because prices are coming down substantially faster than the cost structure,” said Pacific Crest analyst Mark Bachman.

But the decline in prices doesn’t affect all solar firms the same way.

No doubt it hurts providers of polysilicon wafers, such as MEMC (WFR), Wacker Chemie and LDK Solar (LDK). They’re getting much lower prices for their goods than before. Their customers are solar manufacturers.

Amid the module glut, “no one was willing to buy polysilicon at basically any price until it went under $100 per kilogram,” Bachman said. It bottomed around $60, he says, and is $60 to $70 now.

Solar companies that buy polysilicon to make solar cells or solar modules include Suntech Power (STP), Yingli Green Energy (YGE) and SunPower (SPWRA, SPWRB). The glut hurts these kinds of firms now, but they stand to benefit as lower polysilicon prices spark demand, Bachman says.

The problem is that the inventory such companies hold was built when polysilicon cost up to hundreds of dollars per kilogram, and that inventory is now subject to write-downs, since solar firms can’t sell their modules for as much as they’d hoped.

“The main reason is that all the module makers took out their margins to lower prices and make them more attractive to the end user,” Wicht said, predicting module prices will keep falling, to about $2.30 per watt by year’s end.

(more…)

July 24, 2009

SunPower, LDK lead solar stock rally, MEMC slides

Filed under: CSIQ, CSUN, ENER, FSLR, LDK, SPWR, WFR, YGE — Tags: , , , , , , — Jason @ 3:07 pm

Fri Jul 24, 2009 3:07pm EDT

* SunPower shrs rally 27 pct after Q2 earnings top view

* LDK soars 11.5 pct on raised outlook, lifts solar sector

* MEMC stock slumps 10 pct after two analyst downgrades

By Nichola Groom

LOS ANGELES, July 24 (Reuters) – The shares of solar companies surged on Friday after U.S. panel maker SunPower Corp (SPWRA, SPWRB) posted better-than-expected earnings and China’s LDK Solar Co (LDK) raised its sales forecast.

SunPower shares rallied 27 percent to $31.52 after the U.S. company’s earnings, announced late on Thursday, easily beat analysts’ forecasts, while China’s LDK saw its stock rise 12.2 percent to $11.56.

The shares of Chinese solar cell maker China Sunergy Co Ltd (CSUN) also rallied, jumping 11.5 percent to $5.53 after the company said quarterly shipments exceeded expectations and it expects to return to profitability in the second quarter.

Analysts at Citigroup, Canaccord Adams, Credit Suisse, FBR, and Collins Stewart all raised their price targets for SunPower shares. FBR and Collins Stewart also upgraded their ratings on the stock, FBR to “outperform” from “market perform” and Collins Stewart to “hold” from “sell.”

“Although we expect solar stocks to be volatile through (the second-quarter’s) earnings season, our upgrade is more company-specific, driven by the increased business prospects in the ‘rooftop’ segment of the market, which is SunPower’s sweet spot,” FBR analyst Mehdi Hosseini said in a note to clients.

Wedbush Morgan analyst Al Kaschalk, meanwhile, downgraded SunPower shares to “neutral” from “outperform,” saying price competition, high inventory levels and a continued lack of financing in the market continue to impact results, while the stock is fully valued following recent share gains.

(more…)

July 23, 2009

SunPower, MEMC offer hope of solar recovery

Filed under: LDK, SPWR, STP, WFR — Tags: , , , , , — Jason @ 8:00 pm

Thu Jul 23, 2009 8:00pm EDT

* SunPower, MEMC earnings, rev views top Street estimates

* SunPower shares gain 19 percent in extended trade

* LDK Solar raises Q2 revenue view but forecasts loss

By Nichola Groom

LOS ANGELES, July 23 (Reuters) – U.S. solar companies SunPower Corp (SPWRA, SPWRB) and MEMC Electronic Materials Inc (WFR) on Thursday offered hope that the beleaguered solar industry is on the mend, each posting quarterly earnings and giving revenue outlooks that topped Wall Street estimates.

Chinese solar player LDK Solar Co Ltd (LDK) also weighed in with positive news, raising its second-quarter forecasts for both shipments and revenue.

“This is a lot better than what many were anticipating,” Wedbush Morgan analyst Al Kaschalk said of SunPower’s results, which blew past analysts’ expectations and prompted the biggest U.S. panel maker to raise its 2009 revenue range.

The company’s stock soared 19 percent in extended trade to $29.50 after closing at $24.84 on the Nasdaq.

A dearth of financing for renewable energy projects combined with a pullback in solar tax breaks in Spain have led to a flood of solar panels on the market, driving down prices and profits across the industry.

After a dismal first quarter, however, the market proved to be stronger than expected last quarter, SunPower said.

“Demand was better than we expected in most regions,” SunPower Chief Executive Tom Werner said on a conference call with analysts.

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