Why Shares of SunEdison Inc. Dropped Today

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What: Shares of SunEdison  (NYSE: SUNE  ) dropped as much as 11.1% today after the solar project builder announced it was dropping a project.

So what: SunEdison said it is abandoning a 20 MW project it won in February in India because the job is no longer financially viable. Rules about local manufacturing of panels have resulted in rising prices, and those higher costs make the project unprofitable. The move will cost the company a $333,000 bidding deposit.  

Now what: A 30 MW project that SunEdison won will be built, but it appears that costs for 375 MW worth of projects won at auction in February could be under scrutiny. I'd expect to see slightly higher prices for panels this year as the industry recovers, but India's prices will be exaggerated because of local sourcing rules. This is a negative for SunEdison today, but only incrementally, and I'd view the industry-wide sell-off as a buying opportunity.

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Travis Hoium

Travis Hoium has been writing for since July 2010 and covers the solar industry, renewable energy, and gaming stocks among other things.

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Related Tickers

9/1/2015 12:19 PM
SUNE $11.02 Up +0.62 +5.91%
SunEdison CAPS Rating: **