US solar industry preps year's first IPO as results reveal upbeat outlook

The brightening outlook for the US solar energy industry was underlined yesterday, as two of the country's leading manufacturers reported better than anticipated sales and Connecticut-based STR Holdings Inc confirmed plans for the sector's first IPO in 15 months.

STR Holdings, which provides components that protect solar modules' semiconductor circuits, filed a prospectus with regulators detailing plans to sell 12.3 million shares at between $13 (£7.93) and $15, raising an estimated total of $172m.

The company, whose clients include BP Solar and First Solar, said it expects to undertake the IPO on 5 November and begin trading its shares on the New York Stock Exchange under the ticker symbol STRI a day later.

The move will further stoke confidence in the clean tech IPO sector after Lithium-ion battery manufacturer A123 Systems blew away expectations last month, netting about $400m through an IPO before seeing its share price soar 50 per cent on the first day of trading.

The company will be hoping to fare better than the last solar IPO, GT Solar, which raised $500m last year but subsequently saw its share price fall 65.5 per cent as the industry was hit by falling demand and an oversupply of panels.

The still-volatile state of the market was underlined yesterday after both SunPower Corp and MEMC Electronic Materials Inc saw their share price fall despite posting solid sales growth for the third quarter.

Solar panel manufacturer SunPower saw its share price slip 13 per cent after the company announced that a number of large projects were now not expected to get under way until next year, and as a result it expected full-year earnings to be at the low end of its previous range.

The move overshadowed an otherwise solid performance that saw third-quarter sales rise 23 per cent year on year to $466m. Reduced average panel prices mean that net income for the company roughly halved year on year to $12.8m, but chief executive Tom Werner insisted that the outlook for next year was increasingly bright.

"The good news there is that we're still sold out and we go in with a very strong pipeline into 2010," Werner told reporters on a conference call, adding that the company was looking to boost production to meet demand.

Meanwhile, silicon wafer manufacturer MEMC Electronic Materials saw its share price slip two per cent after posting a larger than expected loss for the third quarter and announcing it plans to acquire solar panel installation specialist SunEdison in a deal worth up to $289m.

The company posted a net loss of $44.9m for the quarter after seeing sales fall 43 per cent year on year to $282.9m. However, Ahmad Chatila, president and chief executive at the company, said that throughout the quarter the company saw improved demand from both the semiconductor and the solar markets.

He added that the proposed acquisition of SunEdison would also strengthen the company's position in the expanding solar market.

"This acquisition will provide a third engine of growth for MEMC," said Chatila. "MEMC will now participate in the actual development of solar power plants and commercialisation of clean energy, in addition to supplying the solar and semiconductor industries with our traditional silicon wafer products."