SunPower, MEMC results hurt by falling solar demand

By Nichola Groom and Matt Daily

LOS ANGELES/NEW YORK (Reuters) - U.S. solar company SunPower Corp reported an unexpected quarterly net loss and slashed its outlook for 2009 as a global credit crisis has choked demand for solar panels, sending shares down more than 7 percent in extended trade.

MEMC Electronic Materials Inc, which makes silicon for the solar and semiconductor industries, posted a slight profit for the quarter as sales slid 57 percent. It's stock fell 2 percent after hours.

The solar industry was virtually unscathed by the economic downturn until late last year, when funding for all types of projects dried up, green ones included.

A lack of financing for solar projects combined with a pullback in solar tax breaks in Spain have led to a flood of solar panels in the market, driving prices down and hurting producers' profits.

Excess supplies of polysilicon following an industrywide scramble to add capacity for the burgeoning solar industry have also sent those prices tumbling to around $100 a kilogram after soaring to $500 a kg last year.

Prices on both solar panels and polysilicon are expected to continue their slide, SunPower and MEMC said, though one analyst said sales volumes may have bottomed.

"People were almost in shock in the first quarter in almost every market that you can think of because financing dried up very very quickly," said Jefferies & Co analyst Paul Clegg. "There is a sense that we are digging our way out of that ... but we still have a ways to climb up in terms of being able to finance new projects."

Clegg has "buy" ratings on SunPower and MEMC.