The turning down prices for solar products is more likely to shrink the profit margins for SunPower Corp and LDK Solar Co Ltd this year, the companies said on Tuesday. Germany and Italy, the world’s two largest solar markets, have now decided to cut the subsidies for the renewable energy source in recent months.

The abrupt changes to the Italian solar policy this year have had significant impact on the global solar market and also at the same time the changes have forced SunPower to shift 85 megawatts of solar panels bound for Italian projects to other markets, at a cost of $14 million to $29 million before taxes.

China- based company LDK has also said that the second-quarter margins would be much lower than the first-quarter levels for the only reason that the prices of solar products have continued to reduce. SunPower Chief Executive, Tom Werner, said that the U. S. will be SunPower's top market, as solar-power demand here is widely expected to continuously grow. He also affirmed that America is showing explosive growth for SunPower, particularly as it looks toward the next few years.

With things really not in the favor of the Company, the SunPower, which makes solar panels and builds solar-power systems of all sizes, is now focusing on expanding manufacturing, cutting production costs and expanding its sales reach.