Wedbush Morgan was out with an article in Barrons yesterday highlighting the challenges that remain in the solar market as solar earnings kick off next week. They believe that 2nd half estimates may be too optimistic and earnings will show the negative impact of rapidly declining average selling prices, inventory write downs and cancellations/delays of customer orders. While they generally agree that the drop in average selling prices may spur demand to a degree, the current global economic situation will limit it.
The firm noted that with lower spot poly prices, First Solar (FSLR) doesn’t have quite the advantage it once did with its thin film product, but that the company should retain cost leadership through scale and manufacturing improvements. They expect margins of FSLR to come under pressure due to greater competition and move to service larger utility customers.