This week, the solar sector saw a storm of downgrades. It seems that analyst estimates have been slow to match some of the more morose emerging realities in the space.

Take, for instance, Suntech Power's (NASDAQ:STP) acknowledgement that it laid off 10% of its workforce, or 800 employees, in the fourth quarter. That's not as bad as the rumored 4,000 figure, but it's still a significant slice. As noted in November, Suntech has set its phasers to pause, meaning that expansion is on hold until the clouds lift. That means less manpower required for the time being.

Suntech isn't the only one cutting headcount. Optisolar, who we saw land a huge contract with PG&E (NYSE:PCG) last year, has slashed its workforce in half. Heliovolt, a smaller start-up, also shed employees.

Back to those analysts playing catch-up. Cowen led things off Monday with earnings estimate revisions on everyone from Trina Solar (NYSE:TSL) to Energy Conversion Devices (NASDAQ:ENER). The analyst there cut his 2009 industry demand forecast from nine gigawatts to seven gigawatts. That's still a 20%-plus increase over 2008, so nothing apocalyptic, but it's a hard brake on growth, nevertheless.

Later in the week, a Citigroup (NYSE:C) analyst downgraded First Solar (NASDAQ:FSLR), citing excessive Obama optimism. He also fairly pointed to margin compression as a key issue for First Solar -- in other words, the multiple of earnings that investors are willing to pay for this best-of-breed operator.

Finally, another Wall Street gumshoe whose coverage I'm less familiar with downgraded JA Solar (NASDAQ:JASO) and Suntech on Wednesday. I didn't see any noteworthy insight there -- just general unease about the earnings outlook. Join the club, buddy.

As always, I'd like to end on a positive note. This week did see an impressive fundraising feat by SolFocus, one of the concentrating solar power companies I took a peek at last year. While the capital markets remain catatonic, it's nice to see that promising start-ups can still pull in the green.

Suntech Power is a Rule Breakers pick. Shine a light on any of our Foolish newsletters free for 30 days.

Fool contributor Toby Shute doesn't have a position in any company mentioned. The Motley Fool has a disclosure policy.