Source: SunEdison 

SunEdison (OTC:SUNEQ) is one of the hottest solar stocks around. It is making technological, international, and financial advancements by leaps and bounds. But before you drop your nest egg into this solar stock, it's important to consider the darker sides of SunEdison. Here are three reasons this stock could fall.

1. Modular efficiencyModular efficiency measures a solar system's capacity to harness all the sun's energy that hits its panels. Modular efficiency in the solar world is like fuel efficiency in the automotive world: While it isn't the end-all indicator, it could quite well be the reason your car becomes obsolete.

SunEdison has historically struggled with this metric, tarnishing the value-add and comparative advantage of its products over competitors'. While SunEdison's current lineup boasts an 18.2% efficiency panel, SunPower (NASDAQ:SPWR) has reached 21.2%, a number it boasts as the "world record for highest efficiency."

SunEdison is hard at work on improved efficiency. Just two weeks ago, the company announced a new "zero white space" technology that could ostensibly increase final energy output by 15% and cut system costs by 8%.

But solar panel purchasers will have to wait until at least the second half of 2015 for this improvement, and SunEdison's competitors might have made their own modernizations by then.

2. Size matters
Alongside modular efficiency, scaling is the most important thing a solar company can do to cut costs. This is why electric car maker Tesla Motors (NASDAQ:TSLA) is pursuing its battery Gigafactory, and it's why many renewable energy investors feel safest with large-cap stocks.

SunEdison isn't exactly small, but its $2.1 billion in sales last year left it in third place behind SunPower's $2.5 billion and First Solar's (NASDAQ:FSLR) $3.3 billion.

And while SunEdison is making some smart growth decisions, everything comes at a cost. The company has 15 times more debt than equity, which equates to more aggressive use of debt than 98% of its peers. By contrast, SunPower's debt is roughly equal to its equity, and First Solar's debt amounts to just 4% of its total equity. Debt isn't necessarily bad, but too much of anything can be troublesome. Plus, with the possibility of an interest rate rise in the near future, SunPower won't be able to dig into debt forever.

3. Emerging issues?
SunEdison's international exposure is impressive. Only half of its pipeline projects are in North America, and 20% are in emerging markets.

Source: SunEdison; Capital Markets Day, February 2014. 

But while country-to-country revenue improves diversity, emerging markets carry some degree of risk. Earlier this month, SunEdison signed a joint venture with a Chinese corporation to finance, develop, construct, and own up to 1,000 megawatts of solar farms in China over the next three years. While that opens up a major market, it's important for investors to remember headlines such as "Chinese shoe company's CEO, COO, cash go missing." There's no reason to believe that SunEdison's joint venture will go up in smoke, but there's also no denying that Chinese investments inherently involve less publicly available information and more risk.

Likewise, SunEdison's 5,000-megawatt memorandum of understanding with the government of the Indian state of Rajasthan earlier this week could be a pivotal entry point into one of the world's most exclusive emerging markets. But it also means a bureaucratic burden like nothing SunEdison has ever seen. India's highly democractic and decentralized government can turn a seemingly simple project into a dearth of delays and dead ends.