Shares of First Solar (NASDAQ:FSLR) continued their downward slide as the worsening European crisis began taking its toll on renewable energy projects.  Solar companies such as LDK Solar (NYSE:LDK) and SolarWorld have cut their outlook over the past week as the decline in demand has been sharper than expected. The sovereign debt crisis in Europe and increased capital requirements for banks have resulted in greater difficulty securing loans for clean energy ventures. First Solar’s stock fell from $48 from last Tuesday to around $45 yesterday. The company has been hit considerably since the company announced the sudden departure of its CEO two weeks ago.
Cuts in subsidies in Europe have resulted in players being stuck with excess capacity and high inventories. Companies have also been hit by the pending expiry of the Section 1603 incentive which gave companies a cash grant instead of the tax incentives that are more common in the U.S. 
First Solar may also see pressure on the pricing front with lower polysilicon prices. First Solar’s thin film gives it a cost advantage over multi crystalline module manufacturers as it does not use polysilicon rawmaterial. However, polysilicon spot prices are dropping rapidly which may erode the company’s cost advantages.Notes:
- WRAPUP 3-European renewables caught in perfect storm, Reuters [↩]
- Solar Program to Darken at end of Year, The Street [↩]