Suntech, First Solar Stocks at Historic Lows

Greentech Media

• Why has First Solar's market cap dropped to $5 billion from more than $10 billion just months ago? First Solar's stock, trading at $57.90 and down 8.4 percent, has not seen its stock price that low since April 2007.
• Suntech is the world's largest producer of solar panels. As of last quarter's earnings report, the China-based firm was on track to meet its full year guidance of 2.2 gigawatts. Total net revenues were $830.7 million in the second quarter of 2011. Revenue guidance for full year 2011 was dialed down $100 million to a range of $3.2 billion to $3.4 billion. Gross margins were a slim 4.1 percent in the second quarter of 2011. The firm's ASP declined 7 percent quarter-to-quarter and Suntech expects mid- to high-teen price declines in Q3.
• All solar stocks were in the red yesterday, with Hanwha Solar's stock down 22.41 percent. Yingli, Trina, and First Solar had losses in the 7 percent to 8 percent range, the least scathed in the downward trend. The Dow Jones Industrial Average was only down 2.3 percent.

Is there an upside to this bloody market? Absolutely.
Solar panel vendors will learn to live with lower margins or, alternatively, perish. ASPs will continue to fall. And the solar market will once again exhibit its historic price elasticity and as panel prices drop, the market will continue to grow, and the price of power generated by photovoltaics will fall.