Last fall, SunPower (Nasdaq: SPWRA) announced some accounting irregularities at its Philippines operation. The subsequent amendment to 2009's first quarter financials revealed an operating loss over seven times higher than originally reported.

Investors who sold in the days following that revelation last November have to be feeling pleased about jumping ship. The shares have been slaughtered in the interim. With SunPower trading near all-time lows, is it time to warm up this solar player once again?

After reviewing this week's second quarter report, I can confidently say definitely, maybe. OK, that's not such a confident assertion, but let me explain why I can't throw my full support behind this struggling solar player.

Listening to SunPower's management presentation, you would think that everything is going great. Gross margins are up, and costs per watt continue to fall. Partner AU Optronics (NYSE: AUO) is helping to shoulder the cost of the new Fab 3 manufacturing facility, which should help shorten SunPower's path to $1 a watt costs by at least six months. SunPower's utility and power plant business is booming, with 20 plants under construction in the EMEA (i.e. everything but the United States) region.

Under the surface, though, there are issues that continue to put SunPower's competitiveness in question.

The company has now taken to presenting its panel costs using an efficiency-adjusted metric. This makes the firm look more competitive with the likes of First Solar (Nasdaq: FSLR), but there is still a cost gap of over 20% there.

SunPower spoke of growing market share in its most important markets and segments, and I wish they would have quantified that statement, because most studies I've seen have indicated a loss of market share in places like California.

At the root of SunPower's claims of a brighter tomorrow seems to be the firm's positioning as an integrated solar firm. By that, I mean a company that both manufactures components and constructs solar projects for commercial clients like Johnson & Johnson and utilities like NextEra Energy (NYSE: NEE). SunPower's downstream presence is supposed to give it a leg up as the solar industry shifts to a buyers' market as early as next year. I just wonder how significant or sustainable this competitive advantage may prove to be.

It's true today that SunPower, as a result of its branding, distribution channel, and track record, has better "bankability" than many of its competitors. As firms like LDK Solar (NYSE: LDK), MEMC Electronic Materials (NYSE: WFR), and Suntech Power (NYSE: STP) move increasingly into the system integration space, though, I fear that SunPower's edge won't add up to much.

First Solar and Suntech Power Holdings are Motley Fool Rule Breakers choices. Johnson & Johnson is a Motley Fool Income Investor selection. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his CAPS profile or follow his articles using Twitter or RSS. The Fool owns shares of and has written covered calls on NextEra Energy. Motley Fool Options has recommended buying calls on Johnson & Johnson. The Motley Fool has a disclosure policy.