Shares of solar manufacturer SunPower Corporation (SPWR 2.59%) fell as much as 12% on Thursday after a competitor reported earnings that show a lot of weakness in the industry. At 3:10 p.m. EDT, shares were still near their low, down 11.8% on the day.
First Solar (FSLR 2.54%) reported disappointing guidance after the market closed yesterday, which I covered here. The broad theme was that prices for solar panels are down (which we knew), and competition for projects in 2017 and 2018 is fierce (which we also knew). Now that the market realities are becoming financial realities, it's hitting solar stocks hard.
One thing that could be spilling over to SunPower is that First Solar speculated that Moapa and California Flats project sales to 8point3 Energy Partners (CAFD) could be pushed into 2017, and may not happen at all if the price isn't right. If true, that could reduce the ways SunPower or First Solar can monetize projects on their balance sheets.
Most of the concern in the solar industry right now is around the pricing of solar modules and the competitive pricing in utility scale solar projects. Those are areas where First Solar has nearly all of its exposure, so it's understandable why the stock is down today. SunPower is also exposed to spot pricing and utility projects, but about half of its business is residential and commercial solar, which is less volatile, and isn't seeing the same drop in demand.
I wouldn't read too much into SunPower's results from what First Solar reported. And with SunPower's earnings coming out next week, we'll get a better idea of what's going on in the business.