Shares in SunPower Corp. tumbled after the solar panel maker said it was temporarily shutting down production at all five of its factories due to the coronavirus crisis.
In a regulatory filing, SunPower announced it was idling the factories in France, Malaysia, Mexico, the Philippines, and the U.S. as part of an effort to “proactively address financial and operational impacts of the COVID-19 pandemic and position itself well for when the solar industry returns to strong growth.”
The San Jose, Calif.-based company expects the plants “will come back online in the coming weeks” and to be able to meet customer needs with existing inventory.
In regular trading Monday, SunPower shares fell 5.5% to $6.30 before rallying slightly in the extended session, finishing at $6.39.
As Reuters reports, “Residential and commercial solar installations have been hit hard by pandemic-related lockdown orders that have put the brakes on construction and economic fallout that has crippled consumer and business spending.”
Analysts at energy research firm Wood Mackenzie have predicted that demand for solar installations globally will come in 18% lower this year than it had previously predicted. “In that case, weak demand for solar panels could well be satisfied by stockpiles SunPower and other manufacturers have already produced,” The Motley Fool said.
SunPower is also addressing the virus-related slump in demand by temporarily reducing the salaries of executives — including a 35% cut for CFO Manavendra Sial — and shifting some employees to a four-day work week.
Most of SunPower’s manufacturing operations will be spun off into a separate company as part of a split that is expected to be completed by the end of the current quarter.