Solar panel prices have collapsed in recent weeks as new policies in China unleashed a flood of excess equipment on global markets, dialing up pressure on the industry's manufacturers, Mark Widmar, CEO of solar panel producer and power plant developer First Solar Inc., told investors July 26.
China announced a raft of policies in May that are aimed at cutting back development in the world's biggest solar market in order to reduce the cost of subsidies and accelerate price declines.
"We will likely see industry consolidation as uncompetitive technologies and financially unstable companies struggle to compete," Widmar said on a conference call discussing the company's second-quarter financial results.
First Solar said its new Series 6 line of solar panels, as well as a pipeline of bookings that extends into 2020, is a competitive advantage. However, the company struggled during the second quarter with issues ramping production of the new panels, as well as delayed project sales and "unusually low" panel sales, CFO Alexander Bradley said.
First Solar reported a second-quarter net loss of $48.5 million, or a loss of 46 cents per share, compared to net income of nearly $52 million, or 50 cents per share, a year earlier. Sales fell to $309.3 million in the second quarter from $623.3 million a year earlier.
The S&P Capital IQ consensus normalized EPS estimate for the most recent period was a loss of 3 cents per share.
"From the outset of the Series 6 transition, we anticipated that this time frame would be the lowest point of our earnings power due to lower module production levels, elevated startup expenses and costs," Bradley said. "While there have been immediate impacts to module pricing in international markets from the recent policy decisions in China, we remain focused on executing our strategy."
First Solar shares were down 6.84% at $50 in after-hours trading July 26.