Wednesday, December 28, 2011

SunPower buying Tenesol: beat me harder

Charles Manson said that you beat a man so long and after a while he gets to like the whip. What was SunPower thinking?  Do they want another whipping?  We have 50GW of cell manufacturing capacity in an 20GW world market. There are no financials on the Tensol deal so I'd be guessing if the $165mm was well spent. On the plus side Tenesol has an integration business that might be bringing a backlog.  SunPower's modules are beautiful and definitely worth a small premium but why pay $0.50/w more than the current $1/w?  Buying Tenesol does not seem like a solution for SunPower.

Friday, December 23, 2011

Conergy: it's only hubris if you lose

Conergy is selling it's inverter subsidiary; the giant is dying a death by a thousand cuts.  Conergy planned to parlay their street cred into a marquee brand, manufacture everything in house and capture the manufacturers margin in addition to the distributors margin. Double your money & double your fun.  Pity about the timing. The plan was conceived in a product constrained market when manufacturers could command almost any price.  By the time Conergy finished working out the manufacturing kinks, the global capacity exceeded supply and prices started to sink. Not enough customers wanted Conergy branded product.  Their brand was not strong enough to pull the company through a product surplus market. Conergy shut down the PV plants mid summer.  Now they are selling the inverter division.  Had Conergy succeeded, they would have been heroes. It's only Hubris if you lose.

Wednesday, December 21, 2011

BP Exits the Solar Biz

I always had a soft spot for BP coming into the solar business and was disappointed when they exited.  In full disclosure, my father worked for BP on the refining side for 20 years and BP paid for my schooling in England & university in Scotland.  

BP came in with a bang around 1997 and dominated the US solar industry for about five years.  Their strategy was to be the master distributor for PV, inverters, racking, batteries and BOS and they did a great job.  From my perspective as a poor solar guy, BP was like the rich uncle coming in to raise the family to the next level.  I thoroughly enjoyed working with them and the $100mm they invested. 

BP was well positioned for the advent of the grid tie market in California in 2002. Things went sideways as a result of what was to become a regular event, a leadership change.  Every 2 to 3 years BP HQ would appoint a new head.  My guess is that these young Turks were rotated though the various divisions of BP as part of their leadership training.  The Turks came from refining and chemical to learn what they could and move on. 

Around 2002, BP put in a changed leadership and decided to focus on Home Depot.  It was a brilliant move to take solar mainstream but it had its consequences, namely cutting out the older BP distributors.  With the rapidly growing global grid tie market, there was not enough product to go around & BP cut off their distributors in order to service Home Depot.  Within two years most of the old distributors deserted BP because they couldn't get a reliable supply of product.  BP also opened the door of the US to Suntech.  Ironically it was Roger Efird, who started the BP/Home Depot program, who helped establish Suntech as a force in the US.  This isn't to say the solar distributors were innocents in all this.  Many of them had their hands slapped several times for shipping containers of BP modules from the US to Germany in violation of their distribution agreement.  Eventually it quietened when one of the distributors was permanently cut off after the third offense.

Undeniably it is BP's choice to do what they think is right for the shareholders.  Let's face it solar is chump change compared to the other divisions. I don't fault BP leaving.  Fiduciary responsibility has its dictates.  Arg.

Monday, December 19, 2011

CPV: now making sense?

CPV doesn't make sense to me.  It takes a lot of expense to get the tracker to zero in on the sun and then you have to get rid of the heat from the target.  And without a battery bank to act a fly wheel in cloudy conditions, why bother?  And yet ABB is willing to invest $35mm in GreenVolts.

Don't get me wrong.  I'd love to see CPV/GreenVolts take off.  Hey we are all in the same clean energy game are we not?  CSP on the other hand makes lots of sense.  Granted it is expensive at the moment but they have the storage problem licked.  Both CPV & utility scale PV will have limited growth potential until we can get a battery in place.  I wonder what ABB is thinking?  Yes they can provide their Fresnel lens but who is going to buy the GreenVolts system?

Tuesday, December 13, 2011

REFUsol gets UL certification

Congratulations to REFUsol.  They finally got their UL certification.  I read about their inverters in Photon International in Dec 21010.  The normally reticent reviewers gave REFUsol's 13kW & 17kW high praise with an A+ rating for both medium & high irradiance.  The efficiency ratings were an outstanding 96.4% & 96.7% respectively. SMA has the US residential market largely locked up with over 60% market share.  REFUsol has an uphill battle but they have a product worthy of the battle.

Monday, December 5, 2011

ITC & Dumping

No duties or tariffs will be levied for product brought in before Jan 12th. The Commission will decide March 22nd.  I don't know whether the Chinese dumping; I'll leave that to better minds than mine.  Affordable Solar's primary supplier is US based Schott Solar.  Last Friday we heard from a large Japanese supplier that they are sold out out of their US made product till March.  As a result we put our contingency plans and placed orders for US made product Schott through Q1 2012. 

Based on the duty determination date of Jan 12th, it could be prudent to bring in more Chinese product, in our case Canadian Solar.  The challenge is Q1 is likely to to suck in terms of sales; it's the time to mend nets.  In our case it's staff training.  We bought reluctantly boosted our orders in for American because we anticipate it's price will go up and be in shortage.

I expect Chinese manufacturers will bring in as much product as they can before Jan 12th.  They will have to get everything on the water by the end of this week.  We heard on Chinese mfg will have 40 MW by the end of the year in anticipation.  If Q1 is slow, I expect prices for Chinese modules to go lower as they try to move product against an ebbing tide.

The world continues to turn.

Tuesday, November 22, 2011

Solar Supper

I'm a big fan of bachelor cooking - one pot, 375 degrees and 45 minutes cook time. My daughters will confirm this. Solar meets the "one pot" criterion which is most important for me. Usually I'll cook lunch at the office because I can put the cooker out at 10:30am and have lunch ready around noon. Generally it's a stew like rice & chicken. Here are some pics from a late afternoon meal of chicken & lentils. I started it at 4pm on a fall day. Within 30 minutes using a Zomeworks Solar Cooker the cooking pot was at 170 degrees F. Supper was 5:30pm. The Zomeworks cooker get food hot fast compared to the Burns Milwaukee Solar Oven because it's a parabolic dish. I like both cookers. I use the ZW at home because it's not very portable. The Burns Milwaukee is compact so I keep it at the office and put it in the corner between meals.

Wednesday, November 16, 2011

The King is dead. Long live the King: Unirac hires a new CEO

I used to work across the room from John Liebendorfer, the founder of Unirac, in the late 1990's.  We were one of many who passed through Zomeworks to start our own solar companies.  John came up with a rack design that was universal.  This clever universal design would accept any bolt pattern.  It overcame the problem of custom punching each rail to match a specific module bolt pattern.  Errors were rampant.  John left Zomeworks & over coffee at Einstein's Bagel asked me if I was interested in helping sell Unirac.  I declined.  My reasoning was that racking represented 5% of the PV system cost but 50% of the parts count.  I figured I was smart focusing on the other 95% revenue and fewer parts.  What I overlooked was that racking had the highest margins in the solar manufacturing.  It's one reason why today so many companies like Conergy are producing their own racking.  Today you make 5% to 10% making modules but to 40% making racking.

When I started in solar it was still headed by dreamers & visionaries like Windy Dankoff & Steve Baer. John Liebendorfer and his partner Hal Newman were the next generation who professionalized management in the solar industry.  John & Hal sold Unirac and the new owners took it to the another level by hiring Doug May from Trace/Xantrex (now Schneider). Unirac is the now the dominant brand in the US market for residential PV racking.  The new Unirac CEO Peter Lorentz has an impressive resume including a seven year stint at McKinsey.

I miss the dreamers & visionaries but not enough to want them back.  Let's keep their vision & passion but we need the clear eyed professionals to help grow the industry and navigate the next decade.

The king is dead.  Long live the King.

Monday, November 7, 2011

Photowatt Bankruptcy

Photowatt is owned by ATS Automation. ATS made mistakes roughly 10 years ago and shut down the Albuquerque plant to reduce costs.  It must have been heart breaking because the US PV market just was gaining velocity due to the California incentive programs.  That was when the CEC incentive was still in the $4/w range.  Back in the day I used to show up at Photowatt and load modules into the old Zomeworks F-100 pickup I bought for $150.  Photowatt was the low cost provider at the time. Now Photowatt is in bankruptcy.  Harsh.  Expect more 2nd & 3rd tier manufacturers will be going out of biz in early 2012.

Friday, November 4, 2011

LG to buy Suntech?

Very interesting.  LG has denied making the offer but allegedly they offered Suntech (STP) $1 billion (USD) for the company. As STP's stock has a market capitalization of roughly $500 million, is it worth it? No doubt market consolidation will force unwilling bed-fellows but STP lost $280 million in Q2. Ouch! STP was a high flyer and they bet the farm on growth. They invested heavily in manufacturing assets so they could dominate the PV market. Vertical integration was the strategy de jour. Trina, Yingli & Jinko all believed in a vertical world. No lies, it made sense to me. In just 18 months the world for solar has changed.  The smart growth strategy of yesterday is today's Achilles heel.  With low cost silicon & wafer producers like the young giant GCL, STP and others are left holding older lower efficiency manufacturing assets.

Earlier this year I met Dr Shi at the opening of STP's Goodyear AZ plant & jumped at the chance to shake his hand.  How often do you get the chance to shake the hand of a billionaire!?  When I started in the industry 17 years ago we used to joke about being thousand-aire's, and that was on a good month.  Next time I meet him, his personal net worth could be a fraction of what it was.  How the mighty shall fall.  The issue is not about one man's wealth; it's about ten's of thousands of jobs providing sustenance for hundred's of thousand of families.  Hopefully some good will come of this.

US Supports Solar according to Schott barometer

Very heartening to read after seeing the abysmal results of the publicly traded companies today.

Thursday, October 27, 2011

Waning interest in solar?

Below is a graph showing the search term "solar panels".  "Solar panels” is arguably the most searched term and it peaked in 2008. Could it be that overall interest in solar has waned? The waning may be of no consequence but it is disconcerting for someone in the biz of solar. Perhaps it’s just the froth evaporating.

Wednesday, October 26, 2011

A Darwinian Moment in Solar

More bad news.  Panasonic discontinues expansion plans. Schott slows down its US production line and laid off 23 temporary workers. First Solar & CEO part ways. The dropping price of PV is great for consumers but distributors are losing money on modules they bought at a higher cost.  Because distributors are not ordering from the manufacturers, the manufacturers have too much inventory.  The manufacturers have to dump product so they are going directly to installers & project developers, so further depressing prices.  Count on more blood on the streets through spring 2012.  This is a Darwinian moment. The industry will survive and be stronger for it but count on fewer players.