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SunPower to axe jobs and close facilities as Italy takes its toll
US solar group SunPower will slash 85 jobs and close some of its facilities in Europe as changes to Italy's feed-in tariff (FIT) continue to claim new victims.
The announcement – made on the same day as oil giant Total completed its $1.3bn acquisition of 60% of SunPower – will see about 2% of the solar company’s workforce sent packing.
Many module makers and developers – and SunPower is both – have been squeezed by Milan’s recent decision to shift the Italian PV market away from large-scale arrays under its new FIT regime.
Few others, however, have pushed as fast and hard into Italy as SunPower.
In recent years roughly one-third of its business has come from Italy, where the California-based company has made several major acquisitions.
These include its 2010 purchase of Rome-based developer SunRay for $277m, and its 2008 acquisition of developer Solar Solutions.
The company recently admitted it will need to shift 85MW of modules from Italy to other markets in 2011 as a result of the FIT changes.
SunPower says it expects to incur restructuring charges of $10m-$22m as a result of the layoffs. The restructuring programme will be completed within a year.
Chief executive Tom Werner suggests that SunPower may eventually add more jobs in Italy as it moves its focus there to commercial and industrial rooftop solar, but no timeline for this is given.
SunPower’s management – and many industry analysts – remain highly optimistic about its prospects following the Total takeover.
SunPower managing director Jörn Jürgens tells Recharge the deal will open up myriad new international markets via the French energy giant’s immense global business network.
A global industry shift back towards utility-scale solar deployments is also expected to work in SunPower’s favour.
Werner recently said he believes the US will be the world’s largest solar market within four years. This summer SunPower plans to break ground at a 250MW PV array in California.
In the shorter term, however, the company faces a number of challenges – not least the intense downward price pressure on modules.
Earlier this month SunPower cut its earnings outlook for 2011, blaming the changes in the Italian market.
It now expects 2011 adjusted earnings of $1.20-$1.70 a share, down from its February forecast of $2 to $2.20.