Solar Concerns Turn from Credit Crunch to Price Plunge

real-goods-solar-installOne year ago, two key trends dominated the solar industry: economic uncertainty and scarce credit. If solar companies were to survive, they needed to scramble to adapt their strategies to both. Today, the economy is more stable and credit is freer, and so the industry faces two different trends. The first — a supply glut of solar products — has been in the making for years, and it keeps pushing prices down. The second is only beginning to emerge, but could take root: Demand has picked up for solar installations, especially in homes.
That’s the picture being portrayed in solar earnings reports, and the conference calls to discuss them this week. Real Goods Solar (s RSOL) said on Thursday that its revenue in the third quarter rose 122 percent compared with the same period last year, including the addition of companies it’s acquired in the past year. Excluding those acquisitions, revenue still grew 41 percent. John Schaeffer, Real Goods Solar’s president, said a lot of the increase came from homeowners. In a statement, he noted that the company saw “the return of strong demand for residential solar” during the third quarter. Read More about Solar Concerns Turn from Credit Crunch to Price Plunge

Outright & Expensify Join Forces

Outright and Expensify, web apps that we’ve covered previously on WWD, are joining forces to make expenses management even simpler. As Jennifer reports over on GigaOM, bookkeeping app Outright today releases a beta version of the site that uses Expensify’s API, meaning that credit card expense data generated using Expensify can be automatically imported into your company’s books in Outright. If you’re in the Outright beta group you can try out this feature right now; everyone else will have to wait for the full launch, due in about two weeks’ time.
Outright is part of the Small Business Web, a movement that we’ve written about before, which aims to bring closer collaboration between web apps in order to make their offerings stronger. Expensify and Outright are certainly a very natural fit — hopefully more companies will be persuaded that joining together like this results in a better product.
What other apps would work well together like this?

Can First Solar Shake the Earnings Blues?

Solar companies have spent the past few weeks reporting their latest quarterly results, and the sector is looking battered. Many big names reported discouraging financials for the last three months of 2008, then followed up with even less cheery forecasts for 2009.

But after the stock market closes Tuesday, the solar industry’s favorite son, First Solar (s fslr) steps up with its report. And if any company can buck the trend, it’s First Solar. The stock has held up relatively well so far in 2009; as of Monday’s close it was down 9.5 percent. The S&P 500, by contrast, is down 18 percent. Other solar companies are down even further: Solarfun (s solf) has fallen 43 percent this year, JA Solar (s jaso) has slid 52 percent, and Evergreen Solar has lost 63 percent of its value.

The reasons for the solar slump are simple enough. The credit crunch is hurting the ability of solar panel manufacturers to raise capital to expand future production. The prices of their goods are falling quickly — a welcome development in the long run since it will make solar panels an attractive option to traditional energies — but a grueling process until then. And despite hopes that governments will boost spending on solar energy, there are lingering concerns that at some point that public money may dry up.
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Solar Companies Post Mixed Results

Solar companies are painting a mixed picture of the sector’s health this month, with some companies surprising with strong results for the latest three-month period, and others disappointing. In the latter camp is Evergreen Solar (s eslr), which on Thursday posted a loss in the December quarter on weaker-than-expected revenue, prompting its stock to tumble as much as 11 percent in after-hours trading to $1.97.

Evergreen said it swung to a loss of $52.1 million in the quarter, or 32 cents a share. A year earlier, it posted a profit of $788,000, or a penny a share. The loss included $23 million in charges related to the closure of a pilot plant, an $8 million writedown of equipment and $9.7 million in facility startup costs. The company had previously said it was closing a pilot plant in Marlboro, Mass., as it increased production at a new facility in Devens, Mass.

Revenue in the quarter doubled to $44 million, but came in shy of the $46.6 million that analysts had been expecting. On the positive side, Evergreen said it had $178 million in cash and short-term investments, up from $99 million a year earlier.

Gross profit was equal to 4.6 percent of revenue, down from 5.7 percent in the previous quarter and 28.1 percent in the same quarter a year earlier. The company said lower prices and higher costs related to the Devens facility accounted for the thinner margins.
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SpectraWatt Suspends Factory Plans, Expects Production Delay

Intel (s INTC) solar spinoff SpectraWatt has put its plans to build a factory in Hillsboro, Ore., on hold after being unable to get enough financing, The Oregonian reported this week.

CEO Andrew Wilson told the newspaper that SpectraWatt is searching for an existing building that it could retrofit for less, and it is considering leaving the state. He also said the change of plans will delay SpectraWatt’s first solar-cell shipments by five or six months.

The company, which was raising a $50 million round of funding led by Intel in June, said then that it expected to ship its first solar cells from a 60-megawatt factory in the middle of this year. SpectraWatt didn’t respond to requests for more information Thursday afternoon.

The setback is the latest sign of tough times for solar companies. As a recession is making capital scarce, analysts are predicting an oversupply of solar panels that could lead to a pricing plunge. Jenny Chase, a senior associate for solar at New Energy Finance, expects some 4 gigawatts of panels to go begging this year.

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Suntech Reaches 1GW of Solar Manufacturing Capacity

China’s Suntech Power Holdings (s STP) announced a big milestone today, hitting 1 gigawatt (GW) of photovoltaic cell and module production capacity in Wuxi, nearly doubling the firm’s 2007 output of 540 megawatts.

suntech_headquarters

Today’s news comes after a tough year for solar stocks, with shares of Suntech, Yingli Green Energy (s YGE), JA Solar (s JASO) and Evergreen Solar (s ESLR) all losing more than 80 percent of their value in 2008. But Suntech’s big production capacity could help it ride out the economic storm; the larger output could help push prices down for the company’s solar cells and modules, which could attract more buyers. Suntech CEO Zhengrong Shi said last month that an expected oversupply of polysilicon this year could cut the company’s prices event further — 20-30 percent compared with the third quarter of 2008.
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Solar Stocks Start 2009 With Bad News, But Shrug It Off

Hard on the heels of a brutal year for solar stocks, the early days of 2009 are so far putting out a good share of negative news: sell recommendations from research analysts, a dire outlook from LDK, and Evergreen Solar shuttering a pilot plant.

Investors, though, are shutting their ears to the bad news. Evergreen was only slightly down and LDK ended Tuesday slightly up.

Or maybe it’s the case that the brutal selloff from last year was in part pricing in the news from this week.

Monday night, LDK LDK came out with its dispiriting guidance for the quarter just ended and for the coming year. It lowered its revenue guidance in its fourth quarter from a midpoint of $560 million to $430 million. Wafer shipments will fall from 265 megawatts to 250 megawatts, and gross margins will fall from 11.5 percent to 19.5 percent.For 2009, LDK sees revenue at a midpoint of $2.4 million, down from earlier expectations of $3 billion.

Early Tuesday morning, LDK shares tumbled as much as 11 percent on that news, but what looked like a short squeeze left the stock up 1 percent on the day at $14.99.
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What a Dark Year for Solar Stocks

Many are glad to have shut the door on 2008. Few are likely to be happier than solar-power companies.

Of the six solar stocks valued at more than $500 million (a club that grew much smaller during 2008), none outperformed the S&P 500 index, which fell 38 percent last year. The stock that came closest to matching it was First Solar (s FSR), which lost 48 percent in 2008. First Solar’s low-cost thin-film technology kept profits growing, and kept the stock from falling further.

Behind First Solar came SunPower (s SPWR), which slid 72 percent. Yingli Green Energy (s YGE), Suntech Power (s STP), JA Solar (s JASO) and Evergreen Solar (s ESLR) all lost more than 80 percent this year, which is more than the Nasdaq fell from the frenzied peak of March 2000 to the rock bottom of October 2002 (a decline of 78 percent).

The declines are especially stark considering there was some positive news for solar companies that could have caused a rally in a normal year. Congress finally renewed a solar tax credit. VCs invested billions into solar startups. States like California and Massachusetts were leaning on utilities to use more solar power.
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Evergreen Solar’s EverQ Delays IPO, Becomes “Sovello”

Prince, aka The Symbol, aka TAFKAP, has nothing on cleantech companies these days. Last week, Aptera’s three-wheeled Typ-1 became the 2e, and SunEthanol renamed itself Qteros the week before that. Now we have Germany-based solar manufacturer EverQ, which late last month became Sovello AG. The name change for this joint venture from Evergreen Solar (s ESLR), Q-Cells and Renewable Energy Corp. (s REC) comes as part of a larger move to independence, the details of which were unveiled yesterday. According to Cleantech Group, Sovello will take on responsibility for its market position and marketing. It has also switched to a public limited company from a limited liability company, a move designed to make it easier for Sovello to acquire outside capital for expansion that Evergreen had previously planned to finance.

Sovello also said it will put its public offering on hold. As we reported in late 2007, EverQ’s parent companies had been discouragingly vague about a timeline for the spinoff, committing only to preparing the venture for its IPO, not actually seeing it through.

Leaving flexibility to back out now appears to have been a smart move for the venture. In 2007, publicly traded solar companies were seeing enough gains for us to wonder if it might be the year of solar stock. More than 12 months later, however, despite a recent rally for the sector and Sovello’s relatively firm foundation (EverQ ramped up production to 90 megawatts with two plants in Thalheim, Germany, and reported a 115-percent rise in sales for the first three quarters of this year over the same period in 2007), the market looks quite different. Case in point: Q-Cells, Germany’s largest solar manufacturer, led a decline in shares of solar companies in Frankfurt trading after delayed orders from customers and tight financing forced it to cut earnings forecasts for 2008 and 2009.

What’s It Like Looking for New Media Work Now?

Layoffs have become the dominant story as we near the end of 2008. After writing about the cold economic realities for companies that have had to cut staff, we wanted to find out what it was like for the people who are now unemployed. Just how bad is it out there for new media folks looking for work? We talked with three people at different stages of their job search to see what, exactly, they’re up against.

sarahlaneSarah Lane was with Revision3 for a year and a half before being laid off at the end of October. While she did a lot at the company, she was best known as the host of popSiren. I spoke with her just a couple weeks after she had been let go.

“It’s great to be unemployed sit in my pajamas for like five minutes,” Lane said. The problem she encountered is that even though there are companies interested in her, there’s just a tremendous amount of uncertainty in the market right now. “Some people have said ‘If I could guarantee that you had a job in a year I’d hire you,'” said Lane. Problem is, those companies can’t guarantee anything right now.

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