SunPower: Mr. Heat Miser?

This is Part 1 of a two-part story about SunPower. Part 1 focuses on SunPower's challenges among its existing dealer network in the U.S. In Part 2 of the Sunpower story , the focus in on SunPower's shift to the large-scale solar project business.

SAN JOSE (TheStreet) -- It's gut check time for SunPower(SPWRA) and its investors.

The company's shares hit an all-time low of $10.71 intraday Wednesday before clawing back to $11.30. That compares to an initial-offering price of $27 back when SunPower went public in 2005, and an all-time high of $133.61, reached on Dec. 7, 2007.

Shares of major solar-module makers have declined sharply in the past few weeks -- down 30% as a group, according to Collins Stewart -- beaten down by the euro slide and debt contagion and broader fears (on the extreme side, granted) of the dissolution of the European Union.

It's no surprise, then, that SunPower has been caught up in heavy selling -- with some analysts saying that the decline represented a buying opportunity. But the sharp drop in SunPower' stock price can't be written off as a euro event alone.

The company's May 11 earnings report and later conference call with analysts highlighted big questions about the company's business model.

Even Deutsche Bank(DB) analyst Steven O'Rourke, who met with SunPower officials just on Tuesday and came away with a positive view of the operation, described SunPower as having an "opaque business model."

O'Rourke conceded that few catalysts exist for SunPower shares over the near term, even though he rates SunPower stock a buy. The company, he said, remains "somewhat of a 'show me' story."

Take recent data from the biggest U.S. solar market, California, which is also SunPower's home state and bread-and-butter brand market.

Using information from the California Solar Initiative, part of the state's public utility commission, Auriga Securities analyst Mark Bachman estimated that the number of megawatts SunPower won in solar project applications had grown by 58% year-to-date over 2009. But the market as a whole surged 95%, suggesting a loss of market share on the part of SunPower.