SunPower To Build Plant For Xcel; FBR Cuts Ests; Shrs Off

SunPower (SPWRA) this morning announced an agreement to build a 17 MW solar power plant in Alamosa, County, Colorado for Xcel Energy (XEL). SunPower said that when completed at the end of 2010, the plant will be “the second-largest high-efficiency solar PV power plant in North America.” The project is expected to create 200 jobs during the construction phase.

The deal is contingent on approval of the Colorado PUC and project financing.

Meanwhile, Friedman Billings Ramsey analyst Mehdi Hosseini this morning chopped his EPS estimate on SunPower this morning to reflect continued erosion of average selling prices. Hosseini writes that “despite the brand recognition that SPWRA has in the U.S. market, the severe ASP decline has made it difficult for SPWRA to keep its premium at the levels similar to CY 2008.”

For 2009, his EPS estimate goes to $1.18, from $1.41; for 2010, he now sees $1.16, down from $1.49. And he notes that while small scale projects - those under 5 megawatts - are beginning to receive required funding - financing for larger projects “still face headwinds” and longer and stricter due diligence.

Hosseini cut his price target on the stock to $28, from $33.

SPWRA today is down $1.56, or 6.3%, to $23.06.