SunPower to sell energy storage, potentially lithium ion batteries

Solar company SunPower plans to roll out its first energy storage product, possibly lithium-ion batteries, in a bid to expand its share of the rooftop solar market, company executives said on Wednesday during the company's analyst day. CEO Tom Werner told analysts that selling energy increasingly will require more comprehensive solutions, including energy storage technologies, and explained "this is a fundamental change in how solar companies compete."

Adding energy storage reflects the evolution of the company, which started off as a solar cell and panel maker before it entered the power plant development business. SunPower has carried out pilot energy storage projects in recent years and worked with different energy storage technologies, including advanced lead acid and zinc bromide batteries.

But lithium-ion batteries "will likely be the first technology to have an impact," said Jack Peurach, executive vice president of products. The emergence of electric cars plays a role in making lithium-ion battery the front runner for being paired with solar, he added.

SunPower & Flextronics Factory in Milpitas, CA

SunPower executives didn't provide details, such as the timing and battery suppliers, for its energy storage plans. But the discussion puts SunPower on a growing roster of solar energy companies that are offering or plan to offer energy storage.

SolarCity, for example, has been bundling lithium-ion batteries from Tesla Motors with its solar energy systems and applying for a California program that subsidizes energy storage installations. One Roof Energy is working with battery maker Silent Power to roll out products. Korean conglomerate Hanwha Group, which runs a solar panel manufacturing subsidiary, is an investor in both OneRoof and Silent Power. SunEdison has done a pilot project with a battery system from startup Seeo.

Energy storage will be part of SunPower's plan to expand its reach in the commercial and residential market, where it sells power purchase agreements or leases via its dealers or its own project development business. The company designs the power purchase agreements for its commercial and government customers and leases for homeowners. Power purchase agreements and leases work in similar ways: business or home owners sign a long-term contract of up to 20 years and pay a monthly fee for the solar electricity from the SunPower solar energy systems on their rooftops.

SunPower's foray into the energy storage business will prompt more comparison with SolarCity, which started in 2006 as purely a solar installer. SolarCity is most active in the residential and commercial markets, but it scored the first utility project last year. As a result, the two companies have been competing more intensely in recent years.

In fact, a lawsuit filed by SunPower against SolarCity and five people last year highlighted that rivalry. The lawsuit accused five former SunPower employees of stealing confidential data and brought the data with them when they went to work for SolarCity. The two companies settled on Dec. 31, 2012, and a judge dismissed the lawsuit in January, SolarCity said in its 2012 annual report. It didn't disclose the amount of the settlement.

SunPower executives didn't say whether they will sell energy storage in the United States first or in other regions. Werner said that, for now, energy storage makes financial sense only in markets that offers government incentives. That would include California, Germany and Japan.

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http://gigaom.com/2013/05/16/solar-company-sunpower-to-sell-energy-sto

Home solar leasing business shines for SunPower

Solar leases have become a popular way for consumers to use solar electricity without paying for the expensive upfront price. Case in point: demand for SunPower's residential solar leases is far greater than the money available to finance them, company executives said Thursday.

"Our residential lease business remains strong, with demand outstripping our financial capacity in the first quarter," said Tom Werner, SunPower's CEO, during a call with analysts to discuss quarterly earnings.

The Silicon Valley company signed over 2,100 leases during the first quarter, bringing the cumulative total to over 16,200. SunPower launched the lease program in 2011. The lease sign up rate is roughly the same as in 2012, during which it signed up 11,415 of them through its network of dealers, or roughly 2,800 of them per quarter.

Homeowners who sign leases, which run 20 years, pay a monthly fee for using the solar electricity from the solar panels installed on their rooftops. They don't own the equipment and aren't responsible for its maintenance or repairs. SunPower raises money from investors to finance the leases. The investors, which include banks and companies such as Google, put up the money partly to take advantage of a federal tax credit that amounts to 30 percent of the price of all the solar energy system installed using their funds.

Since the lease business is fairly new, it hasn't been making a big impact on SunPower's financial performance though. The company's shares shot up 17 percent after its earnings announcement mainly because it delivered better financial results than expected.

The company generated $635.4 million in revenue for the first quarter, up 29 percent from the $494.1 million for the first quarter in 2012. It narrowed its losses to $54.7 million , or $0.46 per share, from $74.5 million, or $0.67 per share, year over year.

SunPower makes solar panels and develops power plants. It's building two huge projects in California. It has installed over 90 percent of the solar panels for the 250MW power plant called California Valley Solar Ranch, which is owned by NRG Solar. It recently started building two projects totaling 579MW that their owner, MidAmerican Solar, called Antelope Valley Solar Projects.

Internationally, SunPower continues to do well in Japan, a hot market that began offering fat incentives for solar energy generation after the Fukushima nuclear power plant disaster in March 2011. Through mostly Toshiba and a little through Sharp, SunPower's seeing more demand for its solar panels in Japan than it had anticipated, Werner said. Sales volumes doubled from 2011 to 2012 and could double again in 2013, said Howard Wenger, the company's head of global sales and development.

Most of the company's solar panels are going to residential rooftops in Japan. Living space tends to be small (and more efficiently used) in Japan than it's the case in the United States, so SunPower's highly efficient solar panels are a good fit, its executives said. Its silicon solar panels can convert about 21 percent of the sunlight into electricity, higher than other silicon solar panels on the market today. Silicon solar panels accounted for 89 percent of the solar panels made in 2012, according to GTM Research.

SunPower has had to cut production and costs in the past two years as the global solar market saw a pricing collapse from an oversupply of solar panels.

The average wholesale prices worldwide fell 50 percent from 2011 to 2012 while demand for them grew only 5 percent during 2012, said NPD SolarBuzz. Dozens of solar panel makers around the world have filed for bankruptcy.

SunPower executives said they have beaten their cost-cutting goals.

"It's brutal to be exclusively a module manufacturer," Werner said. "As you look at SunPower, we moved from modules originally to systems a few years ago, and what we sell today is energy in the form of leases or PPA (power purchase agreements)."

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Why First Solar is buying a silicon solar cell startup no one's heard of

First Solar is buying an under-the-radar startup called TetraSun to add expertise around silicon solar cell manufacturing to its technology portfolio, which until now has focused on using the material cadmium telluride to make solar cells. The Arizona-based thin film solar giant announced the pending acquisition on Tuesday during its analyst day - its first since 2009 - in which it laid out a persuasive technology and business development plan fo ...

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http://gigaom.com/2013/04/09/why-first-solar-is-buying-a-silicon-solar

SunPower pulls back on cell and panel production

The world simply has too many solar panels and not enough buyers. This imbalance already has forced many manufacturers out of business and some to make a huge cut in production. That’s what SunPower said on Tuesday it will do at its solar cell and panel factories Philippines.

The San Jose company says it will suspend production at six of the 12 production lines at Fab 2 for solar cells and 20 percent of the solar panel production in the southeast Asian country. SunPower also will cut about 900 employees, most of them located in the Philippines.

SunPower’s CEO, Tom Werner, issued this statement:

“Industry conditions continue to be challenging and while it is never an easy decision to reduce positions, we must make prudent decisions to effectively compete in an industry with significant overcapacity. Additionally, we’ll further our efforts to reduce costs and improve operational efficiencies.”

In April this year, SunPower announced it would shut down another solar cell factory, called Fab 1, in the Philippines. The goal was the same: to reduce costs so that it could sell its solar panels at more competitive prices. SunPower makes the most efficient silicon solar panels on the market, but its special technology also is more expensive. Its strategy has been to charge higher prices for the more efficient solar panels. But this strategy doesn’t work so well when there is a big oversupply problem.

Its main rivals, many of them in China, have been selling their less efficient solar panels at far lower prices. The pricing battle partly contributed to a trade complaint against Chinese solar cell makers, and the U.S. Department of Commerce decided last week to impose tariffs on imported silicon solar cells from China.

The tariffs aren’t likely to stop solar panel prices from falling, however. Chinese companies can skirt the penalties by buying solar cells from countries such as Taiwan and assembling them into panels in China. This approach will still increase their production costs, but not nearly at the levels of the tariffs.

SunPower sold a majority stake to French oil giant Total last year in order to gain financial help. SunPower said its 2012 sales forecast remains unchanged, and it will provide more details about its cost-reduction plans when it discusses its third-quarter earnings on Nov. 1.

SunPower isn’t alone in idling production lines and laying off a huge number of employees. First Solar has been doing that. Some veterans in the industry, such as Q-Cells in Germany, went bankrupt or have been sold. Many startups that tried to scale up production in the past two years failed because they couldn’t reduce their manufacturing costs fast enough. Solyndra and Abound Solar are two examples. Others, such as MiaSole, got scooped up on the cheap by conglomerates looking to add a diverse set of solar technologies and services in their portfolios.

http://gigaom.com/cleantech/sunpower-pulls-back-on-cell-and-panel-production/