It's been a brutal week in the solar space. Fairly small shops like ReneSola (NYSE:SOL) and Canadian Solar (NASDAQ:CSIQ) have seen their stocks cut in half. Most surprising is that Suntech Power (NYSE:STP) is taking a similar beating right alongside them.

Even though JA Solar (NASDAQ:JASO) set the tone last week by pointing out the panic mode in this market, people were clearly unprepared for Suntech's sales slump. Fourth-quarter revenue is being guided down around 40% sequentially. That's coincidentally the same amount the shares dropped yesterday in response.

So, have Suntech's orders simply disappeared? No. Rather, it appears that a lot of customers simply were unable to get the trade credit from banks in time. Something like 35% of expected sales have been delayed, and the "vast majority" have been shifted to 2009, while a few deals are still being negotiated.

Still, the macro outlook is pretty hazy here, and for that reason Suntech has temporarily iced its 2009 expansion plans. The company will still ramp to a gigawatt of capacity by the end of this year, but spending next year has been slashed to a mere $80 million. That money will go toward upgrading production lines to Suntech's Pluto technology, which is demonstrating better conversion efficiencies than were seen in pilot production.

Here's the upshot: With raw material prices plummeting and spending going toward better efficiencies rather than expansion, Suntech may be on a faster path to grid parity than previously expected. So here's to hunkering down. Those who can hang tough -- like Suntech, SunPower (NASDAQ:SPWRA), and possibly even Trina Solar (NYSE:TSL) -- may offer tantalizing rewards on the other side of this solar smackdown.

Suntech is a Motley Fool Rule Breakers recommendation. The analyst team just re-recommended one of its favorite stocks for the fourth time. To read about that and all other future-forward picks, take the service for a spin free for 30 days.

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