MEMC Electronic Materials, Inc. (NYSE:WFR) has announced two deals this week, on in M&A and one in a J-V.  Applied Materials Inc. (NASDAQ: AMAT) also took its chip-equipment prowess into being a supplier for the global solar power opportunity.

After all this is said and done, the solar sector claims that it can create 200,000 jobs.  Also, if these companies play their cards right we named several which could be big hidden winners of the oil spill from BP in the Gulf of Mexico.

As far as the joint venture announced today, the analyst at Lazard Capital Markets has reiterated his BUY rating (and whopping $29 target) on SunPower because of the benefits.  Lazard’s Sanjay Shrestha said the joint venture accelerates the cost reduction roadmap and also ramps up the benefits of scale (higher production at lower cost), while increasing SunPower’s balance sheet flexibility.

There is opportunity here.  The question comes down to whether or not the companies can drive down their costs of manufacturing each cell in a manner close to how fast solar panel prices are dropping around the world.  There are huge opportunities still present, but many will unfortunately be left in the dust.

SunPower’s “A” shares are up almost 20% at $12.89 on active trading today.  The company is one of the few profitable names with low valuations and that is still expected to post top-line and bottom-line growth from operations on the horizon.

JON C. OGG

Netlist Inc. (NLST) is seeing small profit taking after a 500% run in the last week.

SunPower Corporation (NASDAQ: SPWRA) (NASDAQ: SPWRB) is down 13% on accounting irregularities and two downgrades.

NeurogesX, Inc. (NASDAQ: NGSX) is up 11% but off last night’s highs after an FDA pain patch approval.

Pacific Sunwear (NASDAQ: PSUN) is down 20% on wider losses and poor guidance.

Semitool, Inc. (NASDAQ: SMTL) is up 30% on what has to be record trading volume on the Applied Materials Inc. (NASDAQ: AMAT) acquisition.

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JON C. OGG

SunPower does plan to enter into convertible debenture hedge and warrant transactions in connection with the offering of the senior convertible debentures.   SunPower will use approximately $20 million to $22 million of the proceeds to pay the cost of these convertible debenture hedge and warrant transactions; and the remaining net proceeds are earmarked for general corporate purposes, including working capital and capital expenditures.

From time to time, SunPower will evaluate potential acquisitions and strategic transactions of business, technologies, or products, and may use a portion of the net proceeds for such acquisitions or transactions.  SunPower also intends to use a portion of the proceeds to increase the size of the convertible note hedge transactions and for general corporate purposes, and the company may also sell additional warrants.  The company may also repurchase some of its outstanding 1.25% debentures or 0.75% debentures.

Shares closed down 5% at $24.04 today and the market cap before the effects of this offering is $2.07 billion; its 52-week trading range is $18.50 to $107.00.

JON C. OGG

Analysts had expected SunPower to record revenue of $396.8 million and non-GAAP EPS of $0.57. The company came in with revenue of $401 million and non-GAAP EPS of $0.70. SunPower said than 2009 non-GAAP revenues would be in the range of $1.6-$2.0 billion, and fully diluted EPS would be in the range of $2.20-$2.80. Analysts estimates for 2009 are revenues of $1.88 billion and EPS of $2.64, about the midpoint of SunPower’s own projections.

SunPower’s solid report boosted competitor First Solar, Inc. (NASDAQ:FSLR) as well this morning. Still, First Solar shares are off 52-week highs by about 56%, and SunPower stock is off nearly 70% in the same time period.

The companies are looking to get a boost from the US government’s economic stimulus package. Because the details of that package are still murky, recovery in share prices is cautious. But since November, the trend line is slightly up.

SunPower noted that it is "encouraged by the commitment" of the new President and the new Congress to renewable energy. That’s all well and good, but that and $4 will get you a tall latte.

Paul Ausick

Stock (Ticker)                                    Dec. 31      Dec. 15     Change
Canadian Solar Inc. (CSIQ)                2,221,041    2,535,153   -12.39%
Capstone Turbine Corp. (CPST)         15,238,501  15,982,879   -4.66%
Clean Energy Fuels Corp. (CLNE)      3,766,746    3,363,349   +11.99%
Energy Conversion Devices (ENER)   10,903,594   11,784,508  -7.48%
Evergreen Solar, Inc. (ESLR)             23,030,783   24,041,949  -4.21%
First Solar, Inc.    (FSLR)                  7,586,475     7,725,457   -1.80%
FuelCell Energy, Inc. (FCEL)             5,844,014     6,821,520   -14.33%
GT Solar International (SOLR)           2,588,190     2,585,455    +0.11%
Hoku Scientific, Inc. (HOKU)             1,912,737     2,012,192    -4.94%
JA Solar Holdings, Co. (JASO)          14,182,231   15,976,615  -11.23%
Solarfun Power Holdings Co. (SFUN)  3,027,631     3,948,622   -23.32%
SunPower Corp. (A) (SPWRA)           9,418,472     9,619,152   -2.09%
SunPower Corp. (B) (SPWRB)           2,521,597     2,618,116   -3.69%

Jon C. Ogg
January 13, 2009

Stock (Ticker)                                      NOV. 28      NOV. 14   CHANGE
Canadian Solar Inc. (CSIQ)                  2,427,370    3,368,857   -27.95%
Capstone Turbine Corp. (CPST)           17,560,127   18,493,021  -5.04%
Clean Energy Fuels Corp. (CLNE)         3,410,178    3,278,222   +4.03%
Energy Conversion Devices (ENER)     12,318,601   11,092,675  +11.05%
Evergreen Solar, Inc. (ESLR)               24,902,180   25,732,337   -3.23%
First Solar, Inc.    (FSLR)                      9,307,012    7,074,475   +31.56%
FuelCell Energy, Inc. (FCEL)                 9,091,358    9,447,180   -3.77%
GT Solar International (SOLR)                2,614,025    2,092,142   +24.94%
Hoku Scientific, Inc. (HOKU)                 2,040,200    2,442,894   -16.48%
JA Solar Holdings, Co. (JASO)            18,283,207   16,661,472  +9.73%
Solarfun Power Holdings Co. (SFUN)     5,003,987    5,249,784   -4.68%
SunPower Corp. (A) (SPWRA)            11,114,809   12,210,305   -8.97%
SunPower Corp. (B) (SPWRB)              3,230,046    1,990,460   +62.28%

Jon C. Ogg
December 10, 2008

JA Solar (NASDAQ:JASO) is off 86% from its 52-week high,  FirstSolar (NASDAQ:FSLR) is off 56% and SunPower (NASDAQ:SPWRB) is offnearly 71%. Compared with a year ago, JA Solar down 75% and First Solaris down 9%. SunPower, which was spun off from Cypress Semiconductor(NYSE:CY) in late September, has fallen 46% since its IPO.

The conventional wisdom is that solar stocks are following crude pricesdown, just like every other energy stock. There’s a good bit of truthin that.

But there could also be something else at play here. An awful lot ofsolar panels are manufactured in China. Chinese manufacturers employ alot of people. If demand for solar panels drops, what will China dowith their manufacturing capacity for solar panels and the employeeswho make them?

We’ve commented already today on China’sexport prospects. But the country’s bigger problem could be a squeezeon its domestic economy. The level of consumer spending in China needsto increase, and the nearly $600 billion stimulus package thegovernment announced yesterday should be going to new jobs andinfrastructure improvement. However, there was really nothing in theannouncement to indicate that that would happen.

If China invests that money in its export manufacturing sector, themoney will do no good at all. Where will they sell all that new stuff?And building inventories is hardly a winning strategy either.

Solar panel suppliers are not likely to see any help from the $600billion. Until the global economy warms up, China’s solar sector islikely to be more dependent upon the price of oil, economic trends, andon the direction of speculative stocks rather than on filling the voidin supplying endless alternatives to foreign energy dependence.

Paul Ausick
November 11, 2008