Collins Stewart analyst Dan Ries . Ries gave the following reasons for the downgrade:

Ries notes that the credit crisis has lead to increased borrowing costs for solar projects, putting pressure on solar module prices. Also hurting: a 13% drop in the Euro against the dollar since July. Ries also notes that the stock has been trading at about 9.6x estimated FY ‘09 EPS, a premium to the 3-5x ‘09 multiples carried by most of its China-based rivals in the solar sector. (He maintains Buy ratings on Canadian Solar, JA Solar, Trina Solar and Yingli Green.) “We are also concerned that STP has substantial volumes left to book for FY ‘09, and may be forced to go to lower price points,” he adds. “Lastly, we are concerned that its bookings for Italy are not as secure as the company believes.”

In addition to downgrading the stock, he also changed his earnings per share estimate, dropping his 2008 estimate to $1.63 from $1.76, and dropped next year’s earnings per share estimate from $2,69 to $2.39.

Following the downgrade, share prices dropped by $1.50 on heavy volume, closing at $21.50.