Satcon’s PV inverter shipments lower than expected: customers push-out deliveries

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Much weaker than expected demand in Europe impacted PV inverter manufacturer, Satcon Technology’s first quarter financial results. Although Satcon posted record revenue of US$62 million for a first quarter accounting period, the revenue figure was below initial projections of US$65 million to US$70 million. Some shipments were postponed to later in the year by some of its customers due to an inventory build, executives noted in a conference call to discuss financial results. Net loss for the first quarter was US$2.1 million.

“Our performance in the first quarter of 2011 reflected continued demand for our utility scale solar PV systems in both North America and Asia, where Satcon continues to be the market leader,” said Steve Rhoades, Satcon’s President and Chief Executive Officer. “At the same time, our European business was weaker than we expected due to the uncertainty around government policies for renewable energy in several European countries.”

The company noted that first quarter bookings totalled US$35.5 million, representing 132MW of orders with 77% of demand coming from North America and 20% from Asia Pacific, while only 3% of orders were placed from Europe, highlighting the significant lack of demand in key markets such as Germany and Italy due to FiT issues and module prices not declining fast enough to spur renewed demand.

The company shipped the equivalent of 276MW in the first quarter. Large-scale industrial and utility markets (greater than 100 kilowatts) were said to remain as Satcon’s strongest performing area having shipped over 240MW of utility-scale inverter systems in the first quarter, representing 87% of the total for the quarter.

Rhoades noted in the conference call that the weak market conditions in the residential arena would be offset by strong demand from utility-scale projects in North America and Asia.

The executive highlighted that a 30MW project being built by Q-Cells in the US would use 24 of its Prism platform (medium voltage) inverters, demonstrating how the market was maturing with “respectable technology and adoption.”

“We are also seeing growing demand in Asia outside of China in the quarter, we were selected by Wipro EcoEnergy to supply 40MW of our PowerGate 500 kilowatt solution to be deployed at India’s largest independently developed solar plants. This marks the first major step in what we believe to be a strong new market for our utility scale solutions,” added Rhoades in his prepared remarks during the analyst call.

Satcon reported its backlog, which consist of firm fixed purchase orders from renewable energy customers stood at US$72.2 million as of March 31st, 2011, up from US$56.4 million in the same period a year ago. Satcon said that approximately 80% of the quarter-end backlog is expected to be shipped by the end of the third quarter, 2011.

The company guided second quarter revenue to be in the range of US$50 – US$60 million, yet declined to give guidance for the full year.

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