AltEnergy Investor

Solar Integrated breaks into new trading range

Solar integrated Technologies announced yesterday that the Company has achieved International Organization for Standardization (ISO) 9001:2000 certification for its quality management system.  The certification is for the design, manufacture and marketing of proprietary BIPV systems for commercial roofing and portable solar applications worldwide.

According to CEO Jon W. Slangerup ,"This ISO certification gives Solar Integrated another competitive differentiator and provides our customers with added confidence in their decision to partner with us."

I don't know how important this bureaucratic qualification is but no doubt some of you may have noticed a major movement in the stock today.

At the time of posting, the last trade was at 210p - up over 12% on the day and an all-time high. This matters because SIT has missed out on the spectacular boom in solar stocks that so many other solar companies have enjoyed.

So maybe SIT is just arriving late at the party?

SunPower IPO lifts off

SunPower made a spectacular market début yesterday on the Nasdaq, making a 41 percent jump from its opening share price of $18 to $25.45 a share at the market close.

SunPower Corporation designs, manufactures and sells high efficiency solar cells and solar panels that generate electricity from sunlight for residential, commercial and remote power applications. What makes them different is their proprietary all back contact silicon solar cell technology, which they claim produces up to 50% more power per square foot compared to conventional solar cells.

For this you can read 20% efficiency.

Small by solar standards, the company has capacity for 25 MW per year and the plant is based in the Philippines but could expand to 100 MW.

Looks like a nice little earner for Cypress Semiconductor.

China's SunTech Power looks to list on NYSE

According to this article from Reuters, China's SunTech Power is planning to raise $350 m in an IPO in New York.

The company is already big by solar standards, in the top 10 of manufacturers, with a capacity of 120 MW per year. It would appear to be very well placed to profit from China's greater appetite for alternative energy - just boosting the renewables target for 2020 from 10% to 15%. China's new renewable energy law comes into force at the beginning of next year.

Evergreen Solar continues to impress

Evergreen Solar , a developer and manufacturer of PV modules, has come a long way since 2003 when losses peaked at just under USD 15 million. Today it capitalises at $675m and in its just announced Q3 results achieved positive product gross margin of 10.4 percent. This compares with negative 29.0 percent for the third quarter of 2004 and positive 6.2 percent in the second quarter of 2005. The turn-around came in Q4 2004, when the company achieved its first positive gross margins. Then came their joint venture with Q-Cells (also a listed solar stock) in Germany to build a 30 -megawatt solar wafer, cell and module manufacturing plant in Germany.

Evergreen has been fantastically well positioned in the solar boom because their proprietary string ribbon manufacturing technology, means that they can significantly reduce the need for silicon - a very high cost input - and achieve similar effects. This gives them an edge over many other solar firms, because the cost of silicon has risen from $9 a kilo in 2000 to $60 today.

Today, they have also announced their biggest sales contract to date - a minimum of $70 million of photovoltaic (PV) modules to PowerLight over the next four years. 

Xantrex Technology aims for profitability after California wind power deal

Xantrex Technology Inc has just announced a sales deal with recently London aim-listed Clipper Wind Power for $12 million of wind power converters.

Xantrex sees itself as a world leader in advanced power electronics. With the major renewables such as solar and wind providing power not in your precisely chosen quantity or even exactly when you want it, power electronics are vital to smooth out the power supply.

As renewables make ever greater inroads, it will still have to be on the back of better electronics managing the power. That's why Xantrex is important.

Outside of India - where power supplies are extraodinarily unreliable - there aren't many companies doing this. Xantrex though, is one of them.

Q3 for Solar Fabrik

Solar Fabrik AG has just released its latest set of quarterly earnings.

One of Germany's smaller solar companies (turnover EUR 52.1 million in 2004), it manufactures and supplies solar modules, inverters, installation accessories and solar system solutions. This year it is predicted to have a 20 MW output.

What makes Solar Fabrik unusual is that a company this small manages to be independent. Manufacturing in solar is usually dependent on scale. Morover, they have some ingenious products designed for the developing world; a solar powered water purifier and an autonomous solar power plant - the solar home station.

SolarWorld AG triples profits

SolarWorld AG generated a group profit after tax of 33.6 (previous year: 10.3) million EUR in the period from January through September 2005 thus more than tripling the previous year's profit.

The company has had quite a turn around since 2003 when it made a loss of EUR 5.4 million. Aside from the massive improvement in profitability, it has tripled in value since the beginning of the year. And now MM Warburg is rating it as a buy.

Just last week, the foundation stone was laid for a new wafer plant, which it is anticipated will boost annual output to 220 MW by the end of 2006.

Xantrex and Solon AG sign strategic deal

Xantrex Technology Inc. (TSX:XTX), a solar inverters producer, and Solon AG, a European solar module manufacturer, have signed an agreement valued at more than US $10 million. Under this two-year agreement, Xantrex will supply custom solar grid tie inverters to Solon AG.

What's interesting about this is that it marks a clear way of getting into the European (for which read Germany) solar market for Xantrex. There's much more to solar power than just the panels and inverters are crucial balance of systems components. Xantrex claims to have inverters in place for over 3000 MW of wind and solar power around the world. An inverter by the way converts direct current electricity to alternating current.

Xantrex closed yesterday at 8.00 having risen from just over 5 in mid-August earlier this year.

Q Cells AG set to become world's largest Renewable Company

Just before its IPO, German PV cell manufacturer Q-Cells has raised the price range for its   Deutsche Bourse IPO from EUR 29-34 (USD 35-41) to EUR 35-38 (USD 42-46).

What this means is that the company could very well capitalize at over EUR 1.4bn   (USD 1.7bn). Large  capitalizations matter because it makes it easier for big investment funds to take an interest, hitherto a barrier for institutional investors in the alternative energy universe.
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Q-Cells AG as the world’s largest independent producer of mono- and polycrystalline, silicon-based high-efficiency solar cells.

Solon AG

Solon AG, Germany's first listed solar company back in 1998, has just bought a 10 kilowatt hour energy storage device from Canadian firm, VRB Power Systems.

This is an important development because Germany's solar market has hitherto only been grid-connected, without any local energy storage backup. Returns are generated by feeding the solar power straight back into the grid rather than using it yourself.

It's always been my view that this is a more efficient way to use solar power - at source with the batteries and use the grid as a backup.

Q Cells sets IPO price range for Oct. 5th

Q Cells has set it's target IPO range at between 29 and 34 euros per share for its listing on October 5th.

This is a bellweather IPO for German solar companies - the first large one since the inconclusive National Elections. The question is, can Germany's solar stock boom continue?

Ersol Solar Energy's IPO suggests that it can. At the time of writing, the shares are 10 times over-subscribed.

Solarparc up by nearly 10% on the day

Solarparc AG yesterday went up by nearly 10%. The company which plans, project manages, builds and runs solar and wind power stations, was as low as 1.95 euros a share, 12 months ago.

It's odd though that a company that changed its name from Windwelt AG to Solarparc still has 38 megawatts of installed windpower and 2.27 megawatts of solar.

The name is more than a little misleading !

German solar companies like the election result

As talked about here before, Germany has quite a number of solar power companies whose subsidies were at political risk from a new CDU/CSU and FDP government. Now though that the election results have come through, it seems unlikely that even if Frau Merkel has just pipped Schroeder at the winning post, she will have any room to put through unpopular reforms.

That's why SAG Solarstrom, Solarworld, SolarFabrik, Sunways, Phoenix Sonnenstrom, Solar Millennium, Conergy and Solon can all point to a successful couple of days on the German stockmarket now coming to terms with the election stalemate.

SunPower - Nasdaq IPO planned by Cypress

SunPower, a company owned by NYSE listed Cypress Semiconductor Corp is planning an IPO on the Nasdaq in Q4 2005.

The filing provides for an offering of up to $100 million of common stock, plus an option granted to the underwriters to purchase up to an additional $15 million to cover over-allotments.

And according to this article, there are quite a few other solar companies also interested in IPOs - QCells,  ErSol Solar Energy AG and sources at wafer maker PV Crystalox Solar AG and component and systems maker Renewable Energy Corp AS (REC) all said they were considering listing in Europe.

Solar Integrated Tech - down nearly 12%

UK Aim-listed Solar Integrated Technologies has struggled - in stock performance - since going public over a year ago. Recently, it has recovered from its low of 95 and was very close to a new high of 186p, although this is not much different from its IPO price.

Arguably the company has had problems translating from the USA its business model of providing solar roofing membrane solutions to the European market. In California, this has worked well for them. There is however up to twice as much solar radiation per square metre during the Californian summer (2000 watts plus) than there is in Germany - and quite a bit more in winter. So even with Germany's massive solar subsidies, this is no like for like for comparison. Perhaps that is why - almost uniquely among solar stocks - SIT has done so poorly.

Last Friday SIT dropped 20p to 150p. Today the UK had a bank holiday which meant that there were no trades.

So keep an eye on what happens to this stock tomorrow when the market opens again.

2004 - Solar v. Wind - an Industry Comparison

2004 was a busy year globally for both the wind and solar industries. But it's worth stacking them up against each other to do a basic comparison;

2004 - Newly Installed Capacity

Solar - 927 Megawatts

Wind - 7,976 Megawatts

2004 - Industry turnover in Billions of US Dollars

Solar - 6.5

Wind - 9.79

The quick conclusions are then;

1. Wind per installed megawatt is much cheaper than solar
2. Solar production is way behind wind in added capacity
3. Solar is not far behind wind in turnover

However, I suspect that in turnover in billions of dollars, solar power will overtake wind power possibly as soon as 2006. But for the investor, the paradox is that there are many more pure solar play stocks than wind stocks. And I expect this to continue . . .

Kyocera - outlook bright for solar division

In an upbeat article in this week's Time Magazine entitled "Rising Sunlight - How Japan's lack of oil helped make it the world leader in solar panels it was mentioned that for Kyocera - a japanese conglomerate which produces 120 MW of solar panels a year, they now account for 5% of the company's total sales and 12% of its operating profit. Kyocera is listed on the Tokyo Stock Exchange as well as the NYSE and the Nasdaq.

Solar has had much success in Japan. But a crucial reason that was not mentioned in the article is that the price of electricity in Japan is perhaps the highest on earth - 24 cents per kilowatt hour for a retail customer.

Alternatives only become real alternatives when traditional sources of energy are close in price.

In Japan, this has clearly happened.

Outstanding Q2 for Spire Corp

Spire Corporation, a developer of solar energy manufacturing equipment, has just posted Q2 sales, 73% up on the 2nd quarter 1 year ago. And the stock at the time of posting has risen 40% accordingly.

Spire said what had lifted results in the quarter were sales of solar equipment and solar systems - including the sale of two photovoltaic module assembly lines and a major solar installation in the Chicago area - as well as a sale of a licence to the company's solar technology.

There are many solar companies competing to make solar modules with one another, particularly in Germany. There are though far fewer making solar cells. And there are fewer still - like Spire Corp - who know how to make solar energy manufacturing equipment.

It looks like a great niche in a growing market.

Solon and Q-Cells Sign Five Year Agreement

With the fast expanding solar industry, there is tremendous competitive pressure to secure silicon, both further out in time and up and down the supply chain. That's why this deal between Solon AG and Q-Cells is just typical.

Solon AG is a solar module manufacturer, i.e. a component assembler of solar Pv panels. Q-Cells make mono and polycrystalline silicon cells, which the company claims have highest efficiency commercially available at 16%.

The agreement enables SOLON to buy forward solar cells from Q-Cells for a total price of EUR 350 million during the period to 2010. Solon closed yesterday at 29.22.

Solarparc AG, formerly Windwelt builds axis tracking solar system

Solarparc AG, formerly known as Windwelt AG prior to 22nd June, has just developed a solar PV systems that follows the sun, increasing power output by up to 30%.

The name change by the way - which in English translates from Wind World to Solar Park -is to represent the strategic future of the company. They believe that there is far more of a future for them in the solar business. Yesterday, Solarparc AG closed at 16 Euros.

Solar Fabrik - big jump in stock price today

Frankfurt listed Solar Fabrik yesterday closed up 11.34% at 13.75 a share.  As mentioned in an earlier post, they made a very useful stategic purchase of a wafer manufacturer. Perhaps this is still feeding through. It is however still short of its all time high of 16.79.

DayStar Tech - the non-silicon solar play

As I've mentioned here before, a major barrier to costs falling in solar power these last few years, has been the rising cost of silicon. Not all solar companies however use silicon. Take DayStar, which yesterday traded up over 10%, closing at $14.21.

DayStar have developed a thin-film, copper-indium-gallium-selenide solar cell. Once you've got through saying all those words - CIGS for short - the important point is this; DayStar think they can make solar cells quite a bit cheaper than conventional silicon-based ones.

Definitely one to watch.

Where solar power works best

In my letter printed in the Financial Times last Friday, I argued that solar PV power works best in remote locations with batteries. I'm highly sceptical about grid-connecting solar power. A 2 way electrical grid is fine, but grid-connected solar would only really make sense when it is cheaper than the grid. That way that national grid would be the backup. Consuming power as near to the point of production as possible would then be a smart idea, when the full costs of transmission and distribution are factored in.

Anyway, one company that does both on and off grid solar power is the solar division of ATS, a Toronto listed stock. The division is called Spheral Solar. And  as this page shows, all the growth these last few years in the solar industry has been in grid-connected solar power. Still, what the graph doesn't show is that grid-connected solar power is heavily dependent on government handouts.

So investors should bear that in mind and keep an eye on government solar policies.

Europe's Solar Thermal market - industry bettting on new legislation

The penetration of almost all alternative energy in Europe is determined by government mandate. So when targets don't look like they are going to be met, then new laws are proposed.

That's why this story about Europe's green heat market is significant. The industry is betting on a Green Heat Directive.

Very few listed companies are engaged in solar thermal. Plambeck Neue Energien AG though does have a division. It is most popular world over in Japan, China, Greece and Israel.

German solar subsidies - safe with opposition until 2007

Frankfurt listed Phoenix Sonnenstrom AG, which yesterday traded close to a new high of EUR 15.05, had a very high profile political visit late last week. Gerda Hasselfeldt, Deputy Chairwoman of the CDU/CSU parliamentary group and crucially in charge of parliamentary group's energy policy visited Phoenix SonnenStrom AG.

And what she said was critical;

"in the event of a change of government, the current Renewable Energy Act would remain valid until the end of 2007. From 2008 onwards, there will be a follow-up provision assessing the suitability of incorporation of other instruments, such as the eco-tax and emissions trading. Should there be new legislation valid from 2008, PV plants that are already up and running will remain unaffected."

This matters because there is a very good chance that Schroeder will lose Septembers National Elections. And Germany's massive energy subsidies are being blamed - amongst other things - for woeful economic performance.

So German solar investors can reckon with guaranteed income streams from the feed in tariff of up to EUR 57 cents a kilowatt hour, up to 2007.

Solar Fabrik AG to double Capacity

Announced at market opening today, Solar Fabrik is doubling its annual production capacity to 30 MW due to a strategic purchase of wafer trader Global Expertise Wafer Division Ltd. (GEWD). By purchasing the Malaysian company, Solar-Fabrik AG is aiming to insure a supply of solar wafers exceeding 30 megawatt (MW) for 2006.

At the time of writing, the market responded favourably, pushing Solar Fabrik up by just under 10% to EUR 11.75.

Ensuring a supply of solar wafers is a big deal, because there is an enormous supply bottleneck. That's because the silicon wafer market has not kept pace with the demand for solar panels these last few years. Solar Module manufacturers used to be able to use the cast-offs from silicon chip manufacturing. However, in just a few years, chip manufacturing has become so efficient that there isn't much silicon left over. This plus compound growth of 30% a year in solar PV production has helped push up the price of high grade silicon from $9 per kilo to a forecast $60 this year.

So it's easy to see why companies like Solar-Fabrik are reaching back into the supply chain.

Japan and Germany's Solar Rivalry

Figures out late last week show that for the first time in 2004, Germany outproduced Japan in solar panels, making it the no. 1 producer in the world.

Overall, Japan still has the most solar power, at over 1.13 Gigawatts compared to Germany's 0.79 gigawatts. So why is Germany growing so fast, 140% in 1 year?

A recent law has made it viable to start producing large scale solar plants in Germany, of 10s or even hundreds of kilowatts, many times larger than a conventional home setup. But beware of German politics. September's National Election offer a real chance that the ruling Green / SPD government under Schroeder will lose and the opposition are talking openly about reducing renewable subsidies.

That's why Germany's many listed solar companies like Solarworld AG, Conergy AG, Solar-Fabrik AG and others would prefer a Schroeder victory.

Spire Solar's spectacular jump in stock price

Nasdaq listed Spire Corporation is the world’s leading supplier of the manufacturing equipment and technology needed to manufacture solar photovoltaic power.

Just two days ago, they announced an order for four SPI-SUN SIMULATOR(TM) 350i photovoltaic module testers from First Solar, LLC of Perrysburg, Ohio. This promptly sent the stock to a new high of USD 13.37 on 20th July from opening below 7 just two days earlier.

Solar electric power is a very diverse market. Spire is at the start of the supply chain where there is arguably much less competition and higher profits compared to say retail suppliers and installers of solar module systems. Another listed company high up in the supply chain is Tokuyama, a major supplier of polycrystalline silicon feedstock.

Silicon prices have risen hugely over the last few years and to be engaged at the start of the silicon supply chain, looks like the right place to be.

Energy Conversion Devices ramping up production

United Solar Ovonic, fully owned by listed parent company Energy Conversion Devices, is doubling its production capacity to 60 MW to keep up with demand.

This matters because ECD is the largest producer of amorphous silicion in the world and it just got bigger.

What is amorphous silicion?

It is a type of ligher and flexible solar panelling which has a much wider range of application, typically in roofing as a membrane.

Europe's Solar Paradox

If climate drove the uptake in alternative energy, then Saudia Arabia would be the solar electric capital of the world. Several studies have shown that all of the world's electricity consumption could easily be met by solar panels in the Saudi Desert. But Saudi doesn't do that because local fossil fuels are even cheaper and that's my point. For alternative energy, just like most other industries, economics trump everything else, every time. Take Europe for example and how the solar thermal market plays out there . . .

In the latest survey by the European Solar Thermal Industry Association Germany and Austria outpace by far the hotter European Mediterranean Countries (apart from Greece) per capita in their domestic penetration of solar powered hot water. This is principally because they can afford it and perhaps more importantly, they believe in it.

So this is Europe's Solar Paradox. Don't think you'll find solar power in Europe most where the sun shines most. There may even a be a reverse correlation. And the same observation can be made right across the world.