Solar CEO: Italy Risk Has Impact
NEW YORK ( TheStreet) -- A sign of the Italian impact on the solar sector was evident Thursday in comments released by U.S. niche solar player Energy Conversion Devices (ENER). The company estimated that as much as 50% of first-quarter revenue would be negatively affected by European solar incentive changes, and production needed to be dialed back immediately.
"The dramatic and abrupt shift in the French and Italian solar incentive structures has impacted our business and forced us to reconsider our near-term financial outlook," Mark Morelli, president and CEO of Energy Conversion Devices said in a statement aiming to temper expectations for near-term results.
Energy Conversion Devices shares were down 25% after hours on Thursday.
The Energy Conversion Devices CEO added, "Recent events have injected disruptive uncertainty into the markets, which is causing financing sources to put projects on hold and may impact as much as 50% of this quarter's forecasted revenue."France has placed a temporary moratorium on solar installations as it hammered out the details of a new auction process for project awards linked to solar incentives rates. In Italy, wholesale changes to solar policy are expected within a month.
(CSIQ) led the entire solar sector down on Thursday, declining by more than 18% during regular trading. There were a host of reasons for the solar selloff, from the renewed eurozone fears as Moody's downgraded Spain, to fears of a weakening Chinese economy with its trade deficit hitting a seven-year high. A bad day on the tape is a doubly bad day for high-beta plays like solar stocks, typically, too. However, on a solar-specific basis one of the biggest risks remains the changes being contemplated to solar incentives in Italy. The country has been the fastest-growing market in solar and in the fourth quarter, and was primarily responsible for high selling prices across the solar sector.
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