Bruce Springsteen isn't the only one waiting on a sunny day.
The Boss had a hit back in 2010 when he sang about working with the rain falling down, and some solar energy companies are feeling the same way.
Human beings have been tapping the sun as an energy source since the 7th Century B.C., when our ancestors used sunlight to light fires with magnifying glass materials.
Later on, the Greeks and Romans were known to harness solar power with mirrors to light torches for religious ceremonies.
And now, as of January, 73.5 gigawatts of utility-scale solar capacity was operating in the United States, according to the U.S. Energy Information Administration, making for about 6% of the U.S. total.
Just over half of the new U.S. generating capacity expected this year is solar power, the agency said.
Unexpected cancellations in Europe
But there have been dark days for the sector and Oct. 20 was one of them.
Shares of SolarEdge Technologies (SEDG) -) tumbled 30% in afternoon trading after the company warned that its third quarter results will come in well below previous guidance.
Shares of other companies in the industry, such as Enphase Energy (ENPH) -) and SunPower (SPWR) -), also skidded into the red.
“During the second part of the third quarter of 2023, we experienced substantial unexpected cancellations and pushouts of existing backlog from our European distributors,” CEO Zvi Lando said in a statement.
“We attribute these cancellations and pushouts to higher than expected inventory in the channels and slower than expected installation rates.”
In particular, Lando said "installation rates for the third quarter were much slower at the end of the summer and in September where traditionally there is a rise in installation rates.”
As a result, SolarEdge said revenue, gross margin and operating income for the third quarter will be below the low end of the prior guidance range.
Third quarter revenue is now expected to be in the range of $720 million to $730 million, compared with the previous expectation of $880 million to $920 million.
The company said it expects "significantly lower revenues in the fourth quarter as the inventory destocking process continues."
A global 'tipping point'
Although the company is based in Israel, Lando said the adjusted forecast was unrelated to the Israel-Hamas war.
"While there has been some impact on daily routines at our headquarters, our offices and facilities are open worldwide, including in Israel, and we are manufacturing and providing customer support without interruption,” he said.
SolarEdge is scheduled to report full third-quarter results on Nov. 1.
Despite the bad news, a new study by researchers at the University of Exeter and University College London indicates that solar energy has a bright future.
The report said that “a global irreversible solar tipping point may have passed where solar energy gradually comes to dominate global electricity markets, without any further climate policies.”
Solar photovoltaic costs decreased by about 15% each year between 2010 and 2020, the report said, contributing to a nearly 25% increase in installed solar capacity annually.
The report warned that challenges could arise from grid stability, financing, supply chain capacity, and political resistance from regions that lose employment.
“A rapid solar transition may also put at risk the livelihood of up to 13 million people worldwide working in fossil fuel industries and dependent industries,” the report said. “These people are frequently concentrated in communities close to mines extraction and industrial sites, where the closure of these activities can have severe repercussion on the well-being of communities for decades.”
The study concluded that regional economic and industrial development policy can “resolve inequity, and can mitigate risks posed by resistance from declining industries.”
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