Solar Stocks Go Schizo

You may have heard that solar stocks were up this week. You may also have heard that they were way down. You might also have heard that analysts are predicting great things for this year…or that they’re not. What gives? I am no kind of market analyst; in fact, that’s why I needed to delve into this week’s strange stock happenings, because I couldn’t make heads or tails of what was coming over the wires. Here are the key pieces of what’s happened this week:

• New Hampshire-based GT Solar(NASDAQ: SOLR), an industry leader in photovoltaics manufacturing processes, saw its shares spike sharply yesterday, and did huge volume, trading almost eight times more shares than usual. But all was not sunshine and roses: The Street reported that while the spike was a result of GT’s market guidance announcements that revenue and earnings per share would be overall higher than expected for 2010, investors weren’t being careful enough in assessing new versus already reported or cancelled orders from the manufacturer.
• Solar wafer manufacturer MEMC Electronic Materials, Inc. (WFR) was upbeat about its 2010 outlook. Last year’s solar panel oversupply seemed to be slowing and PV Tech reported that in a conference call, MEMC execs said “the company was now shipping wafers to 10 of the top 25 PV manufacturers, compared to having made shipments to only 2 solar customers at the beginning of 2009″. Which you’d think would drive stocks up, right? Um….right, stock market? No.
• For analysts, MEMC’s sunny predictions are countered by the company’s acquisition of solar developer SunEdison, which had a $10 million operating loss last quarter, according to The Street. Plus, there’s a lot of skepticism over SunEdison’s past revenues, and no one’s sure if a solar wafer manufacturer and a solar developer are such good bedmates. They operate on two very different ends of the solar spectrum.
• MEMC’s lack of confidence vote from analysts pulled other solar stocks down with it, like GT Solar (SOLR; remember them from a couple paragraphs ago?), LDK Solar (NYSE: LDK), and JA Solar Holdings (NASDAQ: JASO).
• And then, as if this whole thing weren’t already way out of hand, Chinese solar panel manufacturer Suntech (NYSE: STP) announced that the proposed cuts to Germany’s solar feed in tariff rates would likely push excess solar panel supply State-side, driving prices down just when we thought–again, remember from a paragraph ago?–that the oversupply bust was stabilizing.

Armchair analysts, weigh in here. What are we going to see over the next year, as solar panel prices continue to drop, simultaneously encouraging a boom in the industry while slamming profit margins across all pieces of the supply chain?