Solar Headwinds, Part I
How Solar PV is like Ethanol Tom Konrad, CFA High levels of competition in the the solar photovoltaic (PV) industry mean that buy-and-hold investors should look elsewhere. In May 2007, I published a competitive analysis of the corn Ethanol industry based on Michael Porter's classic Five Competitive Forces model. At the time, Ethanol stocks were flying high, but my conclusion was that "the prospective ethanol investor should be very careful about investing in corn ethanol producers at random." If anything, I understated the case. This chart shows three ethanol stocks that have survived since 2007. As...
First Solar Jettisons Its O&M Business
by Paula Mints
In August, CdTe manufacturer First Solar (FSLR) sold its North America O&M business to NovaSource Power. According to First Solar CEO Mark Widmar, the decision was due to contracting O&M margins and customer demands for more services. The company is also exploring jettisoning its EPC business. First Solar plans to focus on its module manufacturing business.
Comment: Apparently, First Solar finally realized that O&M is low margin and that the EPC business may also not have much margin cushion. Now the company can concentrate on another low margin sector of the solar manufacturing chain, manufacturing.
First Solar has occasionally...
The Solar PV Shipment Shell Game
by Paula Mints Outsourcing has been a common practice in the photovoltaic industry since…always. Ignoring it in favor of reporting higher shipment numbers has been a common practice since…always. There is more outsourcing now than there was ten years ago because the industry is bigger. When the PV industry was at megawatt levels, outsourcing was at megawatt levels. Now that the industry is at gigawatt levels, outsourcing is at gigawatt levels. Today’s outsourcing is also more acceptable in the past everyone did it quietly, today it is out in the open. Yet despite this openness and acceptability,...
Chinese Solar Cos Go Shopping To Avoid Troubles At Home
Doug Young Bottom line: Sputtering progress for China’s solar power build-up could erode domestic panel makers’ performance, prompting some to buy more overseas assets to avoid punitive trade barriers in the west. The latest trouble signs in China’s ambitious solar power build-up are coming in newly released quarterly results from Trina (NYSE: TSL), which has reduced its annual sales targets after scrapping one of its planned new projects in the country. At the same time, China’s industry continues to look for ways to circumvent anti-dumping tariffs in the west by setting up off-shore production and purchasing foreign assets to...
Unprofitable Sunrun Buys Unprofitable Vivint Solar
by Paula Mints
In July, Unprofitable residential solar lease company Sunrun (RUN) announced that it would acquire its unprofitable competitor, Vivint Solar (VSLR). Each share of Vivint stock will be exchanged for .55 shares of Sunrun’s common stock. Sunrun indicated that there were great synergies between the two companies.
Comment: Remember when Tesla (TSLA) adopted Solar City, a company founded by Elon Musk’s cousin? Sorry – remember when Tesla acquired money-losing Solar City and claimed strong growth and profits would follow? Great synergies. A wonderful future. Rainbows, kittens, and a profitable solar future for all.
The residential solar lease and residential PPA offers...
Chinese Commercial Solar Group Formed To Tackle Trade Wars
by Doug Young Chinese solar panel makers have taken an important step to solving their ongoing trade spat with the west by formally launching a private sector trade association to speak on their behalf. The move gives the panel makers their first truly commercial representative to discuss the matter with peers in the US and Europe, providing a better alternative to the government-backed groups that previously spoke for them. This kind of step is long overdue, and should help to de-politicize and hopefully solve what is largely a commercial matter, involving western claims of unfair state...
Italian Courts Seize GSF Solar Plants Complicating Suntech Bankruptcy
Doug Young Asset seizure casts new clouds over Suntech retrench Someone should write a book about solar panel superstar Suntech (NYSE: STP), whose the incredible rise and spectacular fall has taken yet another intriguing twist with word that some of its major assets have been seized by a court in Italy. The Italian angle is just the latest turn in this international story of a company founded by an Australian-educated Chinese engineer, which once look set to revolutionize the solar energy sector, only to be forced into bankruptcy when...
China Boosts Solar With Construction Ban
Doug Young China halts construction of new solar manufacturing plants Beijing took an important step towards rejuvenating the global solar panel sector last week when it announced new steps that will strictly limit new plant construction. This kind of government-led approach is a good short-term solution, as it will halt the introduction of new supply, which in turn will allow prices to stabilize after more than 2 years of steep declines caused by massive overcapacity. But over the longer term, China needs to address the...
First Solar Keeps Buying Solar Projects To Keep Pipeline Full
James Montgomery First Solar (FSLR) has added another mega-scale project to its pipeline, helping ensure there's enough to feed its thin-film solar PV manufacturing machine. Rock formations in Clark County, NV. Photo by John Fowler The 250-MW Moapa project being developed by K Road in Clark County, Nevada, about 30 miles north of Las Vegas, was given a green light last summer, making it the first major U.S. solar project approved on tribal land. Construction has been pushed back roughly a year from the original timeline, with First Solar now saying...
SolarEdge looks to Raise $125 Million in IPO
By Tim Conneally From a huge crop of Israeli cleantech companies, solar power optimization and management startup SolarEdge has filed for a $125 million initial public offering on the NASDAQ exchange. SolarEdge has been talking about IPO since 2011, but opted instead to work with venture capital through three separate funding rounds. By the time it completed its Series D, SolarEdge had raised a total of $37 million from more than ten venture capital groups. The company's CFO recently told Bloomberg that it was difficult to grow such a large company with only private money. An IPO was...
LDK Sells 16.6% of Company in Chinese State Bailout
Doug Young The nascent state-led bailout of China's struggling solar industry has taken another step forward with word that LDK Solar (NYSE: LDK) has just sold a big chunk of itself to a partly state-owned consortium for enough cash to perhaps fund its operations for another month or 2. This new rescue package values LDK at just $140 million, which is probably still too high a figure for one of China's weakest solar panel makers in an industry where everyone losing big money due to a huge supply glut. Let's take a closer look at this latest announcement...
Solar Micro FiT 3.0 as an Investment
Brian Kennelly I am asked this question over and over again and I can answer quite emphatically, YES! Most think I answer that way because I’m a nut about renewable energy and sustainability and my business also sells solar arrays. These are valid points but I still maintain that the OPA FiT program is one of the best, secure and environmentally friendly investments you will ever make! Most people that know me probably are not aware that I was educated and began my career in finance and accounting. A very satisfying time, but alas my entrepreneurial urges got the...
Solar Bonds For Small Investors
By Beate Sonerud SolarCity (NASD:SCTY) is issuing US$200m of asset-linked retail bonds, with maturities ranging from 1-7 years and interest rates from 2-4%. Wells Fargo is the banking partner. While the bonds are registered,SolarCity expects the bonds to be buy and hold, and not traded in the secondary markets. The bond is issued for small-scale investors, with investment starting at US$1000, giving this bond issuance a crowdfunding aspect. Choosing such a different structure allows SolarCity to diversify their investor base – the company stresses that small-scale investors are a complement, not substitute, for large-scale institutional investors. While...
Photovoltaics: 11 Trends to Watch in 2012
2011 Report Card plus my 2012 trends and predictions. by Edgar Gunther Contrary to my stated goal, the Photovoltaics: 8 Trends to Watch in 2011 review and 2012 photovoltaic (PV) trends and predictions post has once again extended well into February. As usual, I won’t be grading on a curve. Photovoltaic Market Demand Growth Last year, I said: In 2011, I predict at least 35% global PV installation demand growth despite Feed-in Tariff (FiT) headwinds in Germany, Italy, France, the UK, Ontario, and the Czech Republic. Grade: Pass To be...
What Just Happened: SunPower Struggles And Restructures
2016 was a wild year and not just for solar and after decades of reliance on government incentives, subsidies and mandates the global solar industry may be inured to unpredictability but the industry as a whole should be wary of global trends. Solar PV expert Paula Mints looked at a number of the developments for solar companies in the December edition of SPV Market Research's Solar Flare. Adapted for AltEnergyStocks.com, this series of articles is reprinted with permission. The high efficiency monocrystalline cell pioneer and manufacturer SunPower (SPWR) began signaling its competitive struggle in early 2016 and...
First Solar Retakes CdTe Crown
James Montgomery Roughly one month ago General Electric (GE) leapfrogged First Solar (FSLR) in thin-film cadmium-telluride (CdTe) solar photovoltaic (PV) conversion efficiency, with an 18.3 percent efficient champion cell a full percentage point higher than First Solar's 17.3 percent mark set last year. That reign proved to be short-lived, as First Solar has produced an NREL-verified 18.7 percent cell out of its Perrysburg, Ohio factory and R&D center. Keith Emery, who manages NREL's cell and module performance characterization group (and the cell efficiency records chart), confirms that the new First Solar cell arrived and...
