Energy Conversion Devices (ECD), Inc. (Nasdaq:ENER), maker of Uni-solar, flexible photovoltaic laminate systems, said March 10 that it is reducing production for the quarter ending March 31, 2011, to 25 megawatts from a planned 27 MWs to 33 MWs. The company attributed the reduction to uncertainty in European markets. The news preceded a steep drop in the company’s stock and prompted at least one ratings firm to reduce ratings on other solar companies.

“It’s in anticipation of reduced orders caused by the uncertainty of changes to government policies in Europe,” said Michael Schostak, ECD’s head of investor relations. Two of its biggest European markets, Italy and France, are changing their solar incentives, which could lead to reduced orders for the quarter.

In a press release, the company’s CEO Mark Morelli said that recent events created disruptive uncertainty in the markets, which is putting projects on hold. The uncertainty could impact as much as half of ECD’s projected revenue for the quarter.

The news caused its stock prices to tumble more than 25 percent from $3.16 at close on March 10 to $2.36 on March 11. The stock opened at $2.49 on March 15. The news also prompted Credit Suisse, a financial services company, to slash its target price by 48 percent to $2.50 from $4.80.

The news also prompted Lazard Capital to reduce its ratings to “hold” from “buy” on a number of other solar companies, including Canadian Solar (NASDAQ: CSIQ), China Sunergy (NASDAQ: CSUN), JA Solar (NASDAQ: JASO) and LDK Solar (NYSE: LDK), according to Forbes.

“We expect better visibility on the timing of our projects after the announcement of the new Italian feed-in-tariff program and the French tender process,” Morelli said.

Looking forward, ECD plans to ramp up production further. “Right now, our top production capacity is 120 MWs. We expect to be at 180 MWs at the end of this year and 210 MWs next year,” Schostak said. The company will continue to expand production beyond that as well.

At this point, the company’s modules are about 8 percent efficient, but the company will unveil higher efficiency modules this summer, which are 10 percent efficient, 12 percent efficient modules in 2012, according to Schostak.

ECD anticipates that Europe will remain ECD’s largest market.

“We still think Europe will be a big market,” Schostak said. But the company also is seeing other markets take off. “We’re seeing a lot of success in North America,” he said. The company also is working to expand into India, Korea and China.

Image courtesy of Energy Conversion Devices.