Q-Cellshas cut working hours for about 2,000 employees, or 80 percent of itsstaff, according to German media reports (picked up by Deutsche Bank’sequity research division). The solar cell maker cited falling demand asthe cause for the move, which came less than a week after OerlikonSolar said it, too, had reduced work hours for about 200 employees (seeGreen Light post).
Q-Cells, like many other solar manufacturers, have hadto lower its sales expectations and scale back factory operations overthe last six months. Q-Cells noted in its 2008 annual report, postedlast month, that the first half of 2009 would be extra tough for thesolar industry, given the economic crisis and the arrival of the winterin which fewer installations typically take place.
"Due to a short term mismatch between global supply ofphotovoltaic systems and a weaker short term demand due to theaforementioned uncertainties in project financing and the generaleconomic situation, inventory has been built up and prices have beenfalling over the last months," according to the annual report.
Inventory build up and the falling prices of solarenergy equipment have caused several companies to takemultimillion-dollar write downs (see LDK Solar Faces Tough Road Ahead, Says Analyst).Financial analysts also voiced concerns about SunPower’s inventorybuild up when the company discussed its first-quarter earnings lastweek. SunPower’s CEO Tom Werner said he expects the inventory todecrease quickly in the second quarter.
Warmer, spring weather should help to perk up demand,but not by much, wrote Alexander Karnick, an equity research analystwith Duetsche Bank, in a research note.
"We suspect there could be a slight [mainly weatherrelated] sequential improvement of shipment levels in Q2. However, weassume that Q2 shipments in terms of [year-over-year] development willstill be strongly below last year’s levels for the entire industry,"write Karnick. "Sharply fallen prices, inventory built in Q4, Q1[market participants speculating about 1GWp inventory across the globe]and under-utilized plants [i.e., short-term work] will likely suppressprofits in Q2 as well."