Q-Cells cuts profit forecast as drive for renewable energy loses power

The Times
December 10, 2008
Robin Pagnamenta, Energy and Environment Editor

Q-Cells, the world’s largest manufacturer of solar cells, cut its 2008 earnings forecasts yesterday, giving warning that a global recession was sapping demand for renewable energy.
Anton Milner, the chief executive of the German group, said that it had been hit by a “flood” of cancellations and delays in customer orders in recent weeks as developers of solar power projects worldwide struggle to raise finance. Tumbling oil prices have also undermined the economic rationale behind renewable energy schemes.
The company, which is planning a production shutdown over Christmas to clear stocks, said that it was cutting its sales forecast for 2008 by nearly 10 per cent to €1.225 billion (£1.072 billion) and its profit forecast by 14 per cent to €185 million.
The announcement has compounded the sense of crisis in the renewable energy industry, which had been seen as one of the few bright spots in manufacturing. Another manufacturer, Evergreen Solar, of the United States, said yesterday that it was delaying a planned $800 million (£540 million) factory in Asia that would manufacture enough solar cells to power a city of 500,000 people.

The announcements came as representatives from 190 countries at a United Nations climate change conference in Poznan, Poland, continued to place clean energy technology, such as solar and wind power, at the top of the agenda as they sought to hammer out a successor agreement to the Kyoto protocol. Achim Steiner, the executive director of the UN Environment Programme, called this week for solar power to play a key role in cutting carbon emissions.
In recent weeks there have been signs that the market is facing a sharp slowdown as demand evaporates. Analysts expect a glut of solar panels and cells to hit the market next year as manufacturers struggle to shift equipment.
New Energy Finance believes that lower costs could have a positive impact on the industry in the longer term by making solar power equipment more affordable in comparison with conventional fossil-fuel based sources of electricity.