Alternative Energy Watch: Solar Woes; Killing Ethanol; Smartphones Invade Smart Grid (CSIQ, YGE, QCLSF, ADM, VLO, PEIX, AVRW, GOOG, AAPL, CSCO, INTC)

Today’s alternative energy news starts off with more lukewarm news from solar panel makers and follows with the latest on pricing for ethanol. We also take a look at how smartphones may have an impact on the market for in-home energy monitors.

Chinese solar maker Canadian Solar, Inc. (NASDAQ: CSIQ) reported results after markets closed yesterday. The company posted fully diluted EPS of $0.13 on revenue of $433.4 million. Analysts were expecting EPS of $0.41 on revenue of $423.5 million. That should tip you off that margins are weakening.

Canadian’s gross margins for the first quarter were lower sequentially, falling from 17% in the fourth quarter of 2010 to 14.7%, but higher than gross margin of 12.4% in the first quarter of 2010. The company said the sequential decline was due to lower selling prices, higher raw materials costs, and holiday shutdowns.

The company shipped 244 megawatts of solar modules in the quarter, up significantly from shipments of 185 megawatts in the same period a year ago. In the fourth quarter of 2010 Canadian shipped 237 megawatts worth of modules, so sequential growth was modest at best. For the current quarter the company expects to ship 245-255 megawatts with a gross margin of 13%-15%. Canadian also stuck by its previous guidance for shipments of 1,200-1,300 megawatts for the full year.

Another Chinese solar maker, Yingli Green Energy Holding Co. Ltd. (NYSE: YGE) issued a statement that it expects first quarter shipments to be lower, by a “low teen percentage,” than fourth quarter 2010 shipments and that gross margin will be about 27%. Previous guidance had shipments increasing by a “mid-single digit” percentage and gross margin at 30%-31%. The company attributed the decline to the recent change in Italy’s solar incentives payments. Like Canadian, Yingli expects to meet previous guidance for shipments of 1,700-1,750 megawatts for the full year.

German solar maker Q-Cells AG (OTC: QCLSF) has also cut its forecast for 2011 sales following a first quarter net loss of about -$58 million. The company now expects 2011 sales to be flat with sales in 2010.

US futures prices for corn ethanol have tumbled following reports from the US Department of Energy that stocks have risen to more than 20 million barrels. A report from the US Department of Agriculture that corn stocks could reach 900 million bushels in the 2011-2012 crop year also weighed on ethanol futures.

In Chicago, ethanol for June delivery fell by -2.3% to $2.505/gallon, while the price in New York was down -3%, to $2.595/gallon and the west coast price was down -2.7%, to $2.70/gallon. Lower prices for ethanol will affect revenue and profits at major producers like Archer Daniels Midland Co. (NYSE: ADM), Valero Energy Corp. (NYSE: VLO), Pacific Ethanol, Inc. (NASDAQ: PEIX), and Aventine Renewable Energy Holdings, Inc. (OTC: AVRW).

Finally today, smartphones from Google Inc. (NASDAQ: GOOG) and Apple Inc. (NASDAQ: AAPL) could poach on the market for in-home energy display monitors, which includes some big names like Cisco Systems Inc. (NASDAQ: CSCO) and Intel Corp. (NASDAQ: INTC). A free app called PowerMeter for Android-based smartphones allows customers to monitor smart meters and other energy monitoring devices installed in a home.

The operative word is “free.” Cisco, Intel, and others have developed monitoring devices, but most cost around $200 and are not mobile. Those devices may still have a place in some homes, but with smartphones grabbing a larger share of phone sales, the free app combined with mobile access to a home’s devices is likely to force competitors to give up on pricey hardware and compete in a software-only business.

Paul Ausick