April 6, 2009 ndash; Analyst Comments ndash; Cowen amp; Companyrsquo;s Rob Stone weighed in on the solar sector industryrsquo;s outlook this morning cutting estimates again across his solar coverage on further erosion in ASPs, noting that Q1 results could put some pressure on the group. As he noted, this shouldnrsquo;t be too much of a surprise to anyone, as prices have been on a steady decline over the past few quarters. Stone accordingly made adjustments on all companies he is following including:

Key Takeaways:

middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Spot prices on poly have fallen to $80-$100/kg while wafers are about $1.20/watt. Module prices are $2.60 -$2.80, and Stone thinks prices could fall another 5% in Q2. Expect another round of inventory write-downs;

middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Climate Bill which could include a national renewable electricity standard of as much as 25% by 2025 could be a catalyst for solar, but it could take a while to get legislative support;

middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; The primary challenge for PV demand remains a lack of project credit, and with the current legislative priorities in Washington, the credit markets may be challenged in getting the focus and funding required.

middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Evergreen Solar (Nasdaq:ESLR) ndash; Cut 2009/10E revenue to $306.9 million and $450.4M, EPS to $(0.24) and $0.08), ASPs of $2.81 and $2.50, modeling GM of 17.1% and 22.2%, with expectations of cutbacks to conserve cash. MAINTAIN NEUTRAL RATING;

middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; SunPower (Nasdaq:SPWRA) ndash; Cut 2009E revenue to $1.48 billion on lower systems revenue, maintaining 2010E revenue at $2.28 billion. Cut 2009/10E EPS to $1.72 and $2.76, noting that higher efficiency modules should continue to drive a premium ASP in the components channel, cut GM to 26.1% and 25.4% and thinks SPWRA might need to cut FY guidance reflecting some ASP and margin pressure. MAINTAIN OUTPERFORM RATING.

middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Suntech (NYSE:STP) Cut 2009/10E revenue to $1.75 and $2.25 billion, maintaining ESP at $0.44 and $0.99, sees ASPs of $2.66 and $2.40. Modeling GM at 16.2% and 18.9% noting that there may be downside from inventory adjustments. MAINTAIN OUTPERFORM RATING.

middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Trina Solar (NYSE:TSL) Cut 2009/10E revenue to $700 and $915 million, cutting E/ADS to $0.87 and $1.76, with lower ASPs of $2.53 and $2.24, GMs of 17.5% and 18.9%. Lower silicon prices should offset lower ASPs. MAINTAIN OUTPERFORM RATING.

middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; China Sunergy (Nasdaq:CSUN) Cut 2009/10E revenue to $212 and $285 million, cutting E/ADS to $(0.25) and $0.26, modeling ASPs of $1.76 and $1.53, cutting GM to 7.8% and 15.2%. MAINTAIN NEUTRAL RATING.

middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Energy Conversion Devices (Nasdaq:ENER). Cut 2010/11E revenue to $491 and $776 million, cutting EPS to $0.83 and $1.86, modeling lower ASPs of $2.51 and $2.28, noting that lower ASPs will negatively impact GM to 29%. MAINTAIN OUTPERFORM RATING.

middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; First Solar (Nasdaq:FSLR). Raised 2009E revenue to $1.85 billion and cut 2010 to $2.6 billion, cutting 2009/10E EBS to $5.90 and $7.55. Stone added $70 million project revenue this year from the OptiSolar deal. Adjusted ASPs to $1.93 and $1.71with lower GMs of 49.2% and 48.2%. MAINTAIN OUTPERFORM RATING.

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