First Solar: European Market Is A Mess, Q1 Sales Flat

Changes in solar incentives in key markets such as Germany and Italy are making life difficult for major players such as First Solar, which reported a flat first-quarter revenue and lower earnings on Tuesday afternoon. "With a lot of pending changes, the market started out really slow in 2011," said Rob Gillette, First Solar's CEO, during a conference call with analysts. "We expect the European industry demand to go through a period of adjustment in the second and third quarter." Manufactures saw solar panel prices falling faster than expected, Gillette said, and the lower selling prices were partly responsible for the company's financial results. Europe is the largest solar market, a result of a type of incentive policy that requires utilities to buy solar electricity at government-set, premium prices. The prices are supposed to fall over time as the market grows and production costs drop, but political leaders in Europe in recent years have taken to making extra cuts to curb explosive growth and minimize the impact on consumers, who help to pay for these incentives through their electric bills.

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