Clouds Remain Over Solar Industry

Posted by: Mark Scott on May 12

Here’s a quick temperature gauge of the global solar market. Germany’s Q-Cells, the world’s largest maker of solar cells, reported a first-quarter net loss of €391.9 million ($534 million) on May 12 and cut its 2009 sales targets to between $1.8 billion and $2.2 billion — down from a previously announced $2.3 billion-to-$2.9 billion range. On the same day, German solar module manufacturer Solon similarly announced a first-quarter net loss of $25.2 million, adding the company expects to report a further loss for the current financial quarter.

The fact two of the world’s leading solar companies posted poor results, by itself, isn’t that interesting. The green energy sector has been struggling since the second half of 2008. Yet what’s worth paying attention to is both companies’ forecasts for the rest of the year. Q-Cells cut its yearly sales targets by 22% to 25%. And in a statement, Solon said: “In response to the persistent lack of market visibility, the Management Board deems it appropriate to wait until later in the year to announce a forecast for 2009 sales and earnings.”

That shows the economic incentives for green energy announced by governments worldwide has yet to trickle down to the industry. For sure, (government-backed) funding is supposed to pick up by the end of the year. But in the short-term, companies like Q-Cells and Solon will continue to bear the brunt of the global recession.

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