UPDATE 2-Akeena Solar loss widens, warns of weakening demand

(Adds background, analyst's comments, updates share movement)

By Nachiket Kelkar

BANGALORE, May 8 (Reuters) - Solar power systems maker Akeena Solar Inc (AKNS.O: Quote, Profile, Research, Stock Buzz) reported a wider-than-expected quarterly loss due to higher operating costs and it warned of a weaker demand for the rest of the year, sending its shares down as much as 19 percent.

Akeena's Chief Executive Barry Cinnamon said installations and customer inquiries were high, but bookings did not keep pace,

"Since the beginning of the second quarter we have seen signs that a looming recession and tightening credit are weighing on consumers decisions to invest in residential solar installations -- even with the price of energy skyrocketing," Cinnamon added.

Analyst Adam Krop of Ardour Capital Partners said by phone that the company was realizing the difficulty to compete in a recession, especially when credit is in short supply, as most of the residential solar systems are installed using a home mortgage loan.

"It is going to be three to four quarters of really difficult time for them," Krop added.

For the first quarter, Akeena posted a net loss of $4.6 million, or 16 cents a share, compared with a net loss of $933,000, or 6 cents a share, a year earlier.

Net sales nearly doubled to $12.2 million mainly due to higher volume of residential and commercial installations, which touched about 1,587 kilowatts.