Demand rebounded from earlier this year, but pricing is a wild card and great uncertainty will continue into 2010, the largest solar module producer said Wednesday.
A First Solar farm in Nevada. The company has won new projects in California and China recently
First Solar described pricing environment as “unclear” as the beleaguered industry looks toward the coming year.
When manufacturers suffered from over production and excess supply earlier in 2009, First Solar responded with a rebate program. The effect in the third quarter was to cut prices even as it lifted demand.
“Strong demand will enable us to sell all that we produce this year,” said Executive Chairman Michael Ahearn. But pricing is likely to remain under pressure.
The company’s gross margin fell in the third quarter and is projected to fall again in the fourth (to 41 percent to 44 percent from 50.9 percent in the third).
Ahearn said demand has been particular strong in Germany, ahead of a potential cut in the feed-in tariff for solar as the newly elected government takes over. Italy and France also generated solid demand.
But, the company’s third-quarter financial report, released Wednesday, showed the impact of the rebates. Revenue fell well below what analysts had predicted (to $480.9 million compared with expectations for $529 million). First Solar said it may have lost $74 million in sales because of the price cuts.
It also had to defer $58 million in revenue when a Canadian power plant deal concluded just after the quarter ended. The company’s stock fell even though quarterly profits were strong.
