Solar stock plunges more than 20%
Solar power took a big hit on the stock market today. The price of First Solar (FSLR) plunged more than 20% today after company CEO told investors on a conference call that 10-15% of their 2009 orders were at risk of defaulting.
In spite of taking steps to accommodate customers with easier payment terms and volume pricing and even going as far as to take equity stakes in projects having trouble getting financing, they still expect that many of their customers won't be able to follow through with their orders this year.
The markets freaked out as analysts cut their target prices and changed ratings to sell, dropping the stock's price from $137 to $107, furthering a slide from a height of $310+ this time last year.
The long term prospects for solar remain strong as advancements in technology continue to drive the cost per kilowatt down. The Obama Administration has made it clear that solar power will be a big part of our green energy future and the sun will be shining just as bright in a few years as it is now. Solar makes too much sense to not make money long term.
The hit that First Solar took today was the fault of the current economic crisis. As credit markets remain tight, funding for solar is getting increasingly hard to come by, especially in the face of sub $40/barrel oil.
Solar energy isn't going anywhere anytime soon and First Solar will survive and thrive, but it could be rough in the industry for a bit. I'll be watching this stock.
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