UPDATE 1-REC Q2 core profit misses view, outlook grim

* EBITDA down 75 pct to $35.7 mln, lags f'cast

* Says solar module demand, prices weak

* Keeps "challenging" 2009 polysilicon output target

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OSLO, Aug 11 (Reuters) - Norway's Renewable Energy Corporation (REC.OL), one of the world's biggest solar energy equipment makers, posted a bigger-than-expected fall in second-quarter core profit and warned of tough markets ahead.

Earnings before interest, tax, depreciation and amortisation (EBITDA) fell to 218 million crowns ($35.7 million) in April-June from 889 million a year ago, missing an average forecast of 252 million in a Reuters poll of 18 analysts.

The solar sector -- once spoiling investors with stellar growth rates -- has fallen victim to a crisis of tight credits and oversupply, though solar subsidy programmes recently introduced in the United States and China could help an industry revival.

"Availability of financing for new large solar energy investment projects is limited and the demand for solar modules remains weak compared to last year," REC said in a statement.

REC missed forecasts largely because of poor performance by its solar unit, which makes modules. REC also makes polysilicon and solar wafers.

It said low levels of solar installations meant that producers built up inventories, which pressured prices of modules and forced cutbacks in production.

REC said its module production would return to full capacity in late August but may be "temporarily reduced also during the second half of the year, depending on the market situation."

Challenging markets and its ambitious investment plans had forced REC to slash production of wafers by 35 percent, restructure debt and issue new equity during the second quarter. REC affirmed its 2009 polysilicon production target of 9,000 tonnes after its Silicon III plant in Moses Lake, Washington started ramp-up of commercial production early in the third quarter, in line with previous guidance.

"However, certain interruptions should be expected in the ramp-up phase... This could negatively impact production volumes within a particular period and challenge the full year production target," REC said.

(Reporting by Wojciech Moskwa; editing by John Stonestreet)