SunPower drops nearly 20% after pausing some operations

By Sourasis Bose

(Reuters) – SunPower shares plunged nearly 20% on Thursday after the solar company told customers it is pausing some operations, including scrapping leases and purchasing power from its own sales platform and the suspension of shipments of new products.

In an online communication seen by Reuters and confirmed as authentic by the company, SunPower said it would no longer sign new agreements and could not support installation services for shipments in transit or already delivered.

Its shares were trading 18.6% lower at $2.06.

“We continue to devote our attention to resolving our financial situation and are actively working to address our current challenges,” the company said in a statement to Reuters.

Companies providing solar and storage solutions have struggled with rising inventory levels amid weakness in the rooftop solar market.

Metering reforms in California – the largest solar market in the US – have further reduced demand, reducing the rates residential customers receive from the grid.

SunPower has had a challenging few quarters, having received a subpoena from the U.S. Securities and Exchange Commission in February regarding its accounting practices.

The company’s CEO also left the company in the same month, while its auditor, Ernst & Young, left in June.

In April, it announced plans to reduce its workforce and eliminate most of its direct sales channels as part of a restructuring plan to control costs.

Major energy company TotalEnergies, one of SunPower’s largest shareholders, declined to comment.

Gordon Johnson of GLJ Research lowered the company’s price target to $0 and raised questions about investors’ commitments to the company.

SunPower’s problems could likely boost competitors Sunnova and Sunrun, according to analysts at Roth.

(Reporting by Sourasis Bose in Bengaluru; Editing by Tasim Zahid)