Economic Woes Keep Clouding Solar

The economic slowdown continued to cloud the solar stock market today. Akeena Solar (AKNS) released its first-quarter results, reporting a widened loss of $4.6 million, or 16 cents a share, and warned that it sees softening demand for the remainder of the year. Meanwhile shares of Real Goods Solar (RSOL) made their debut on Wall Street, opening at $9, down from their IPO price of $10, which priced at the bottom of the $10-$12 range. The stock has continued to fall in after-hours trading, dipping, at last check, to as low as $8.65.

This comes a week after First Solar reported healthy earnings only to see its stock go on to lose some 8 percent, leaving Kevin Kelleher and market analysts wondering what had happened.

Akeena CEO Barry Cinnamon said in a press release announcing the latest quarterly results that the “looming recession and tightening credit are weighing on consumers’ decisions to invest in residential solar installations — even with the price of energy skyrocketing.” And while revenue was up 95 percent over the first quarter last year, margins were down due to higher panel costs and likely investment in Akeena’s proprietary rack system, Andalay.

This is bad news for all those “green-collar jobs” we hear so much about in relation to residential solar. Despite increasingly creative financing offers and technical innovations, as Nat Bullard, an analyst at New Energy Finance, told Earth2Tech.com, “It’s a market with a great number of players whose margins are being squeezed.” Further, he said, “In the long run, residential solar installation is not a high-return business.”

With the housing crisis and credit crunch effecting all sectors of the economy, residential solar doesn’t appear to be an investment that many homeowners are willing to yet make, even in the face of rising energy prices. In the meantime, the expiration of solar tax incentives is inching closer and Congress it trying to put together an energy and economic package to stem the losses. For small-scale solar, even darker days may lie ahead.