SolarWorld, Q-Cells and Nordex are among the latest renewable energy companies to be hit by a mix of high inventories, slower demand and banks tightening their purses regarding wind parks.
Solar companies in particular suffered as they ramped up production last year to meet a surge in demand from Germany and Italy where customers rushed to buy solar panels before governments cut vital subsidies.
Both economies are reducing so-called feed-in tariffs to make the solar sector more productive, and subsidies and prices have been falling at a faster rate than manufacturing costs, leading Germany's renewable elite to slash their 2011 outlooks.
Pressure on governments has also increased after debt problems in the eurozone escalated, forcing governments to find ways to save costs, including EU-paymaster Germany as well as Italy, which last week pushed through an austerity package demanded by the European Union.
In Spain, the likely new centre-right government plans a major overhaul of the energy sector, possibly axing subsidies for wind and solar power as the euro debt crisis makes funding very costly.
"The sovereign debt crisis in Europe and rising equity requirements imposed on banks have rendered financing of wind farm projects more difficult again," said a statement from German wind turbine maker Nordex, adding it now saw 2011 sales of €920 million, instead of €1 billion.
SolarWorld, Germany's No.2 solar company by sales, also cut its outlook, saying it no longer expected 2011 revenue to reach last year's €1.3 billion.
"In the entire market, the demand in the third quarter of 2011 developed worse than expected," Chief Executive Frank Asbeck said, adding he saw prices for modules falling by another 10% in 2012 after a 40% drop this year, making only single-digit margins possible.
Nuclear exit, catastrophic finances
Q-Cells, once the world's largest maker of solar cells, said finance chief Marion Helmes resigned following a wider-than-expected quarterly operating loss.
"The lights go out at Q-Cells. The CFO is leaving the sinking ship, EBIT is more than just weak and this all doesn't look good for the company. Quite the opposite: the balance sheet could be described as catastrophic," a trader said.
Along with peers such as First Solar, Suntech and Yingli, Q-Cells has been hit by falling prices while Germany's decision to pull out of nuclear power did not translate into additional support to the industry.
In fact, analysts and industry experts see a return of conventional power and imports rather than a wide-ranging government-backed expansion of renewable power.
Not all gloom and doom
However, three European renewable energy groups gave a ray of hope amid a dark outlook for green energy in 2012.
SMA Solar, Germany's No.1 solar group by sales, posted higher-than-expected quarterly results, benefiting from strong business in the United States, Belgium and Italy as well as increasing demand for its maintenance services.
Spanish wind turbine maker Gamesa forecast an uptick in 2012 sales thanks to its expansion into new markets and stuck to its 2013 objectives just two days after larger peer Vestas scrapped its long-term goals.
One of the world's largest wind power generators, Spain's Acciona, posted nine-months results above estimates, boosted by higher power prices for its renewable energy.
"There just a little ray of sunlight shining through for the sector, parts of which are in trouble otherwise. For the solar sector there are some clouds on the horizon," a Luxembourg-based senior trader said.