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Why did SMA Stock implode by 31% and wash all Global Solar Stocks in Red

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The biggest solar inverter company SMA Solar gave a startling forecast of an annual loss in 2013 catching the investors by surprise. Note greenworldinvestor has already predicted that SMA Solar faces dire problems as its loses market share and margins to low priced Chinese competition.

Will SMA Solar Die like Q-Cells and Centrotherm as Chinese Solar Inverter Companies gain Traction

Many of the Chinese electrical heavyweights have entered the industry lured by the massive domestic market in China which is set to dwarf other countries from 2012. It is notoriously difficult for a foreign company to make a mark in China where local companies have a huge advantage through cost and implicit support. So SMA Solar is set to lose out in the biggest solar inverter market. Also SMA Solar Inverters suffer from the problem of higher costs compared to the Asian solar inverter players. Even US solar inverter companies like Solectria have lower costs than SMA. As solar system price has come down drastically, pressure has increased tremendously on solar inverter companies to lower prices. The days of 40-50% GM for solar inverter players are gone for good and the stock price has already discounted that.

SMA stock down by more than 30% as global solar stocks washed in red

The global solar industry has been in a prolonged trough for a long time as overcapacity created mainly in China has led to losses for almost all companies in the solar supply chain. The solar inverter companies which in the last downturn had managed to maintain their profits and margins, have not been so lucky this time. Satcon has already declared bankruptcy while others like Power-One have fired hundreds of workers. Now the biggest PV inverter player SMA too has been forced to downsize as it can no longer maintain the boom time growth and profits.

The whole solar industry has seen a strong decline in stock prices but the latest shocker from SMA Solar led to a sharp decline in all listed US as well as European solar stocks. Chinese solar panel stocks which are already below a $1 saw a further double digit cut. Investors now face the prospect of a bleak 2013 following dismal 2011 and 2012 for solar stocks.


SMA Solar, Germany’s largest solar company, warned of a plunge in third-quarter sales and earnings, in line with analysts’ expectations, as the solar power industry struggles with falling government subsidies.

after it said on Thursday it could not rule out an operating loss for next year, due to a global industry crisis.The company also said it will cut 450 employees worldwide and stop using 600 temporary staff.

Sales are expected to be further hit due to weakened solar support and the company forecasts plummeting sales in 2013 of up to $1.69bn, compared to the predicted potential $1.95bn expected to be achieved this year.

“The growth impulses of the non-European photovoltaic markets are not sufficient to compensate for the expected decrease in European demand,” stated Pierre-Pascal Urbon, speaker of SMA’s Managing Board.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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