Evergreen Solar's Long Term Outlook 36 comments
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I wrote an earlier article about the long term outlook of the entire solar industry and I picked Evergreen Solar (ESLR) as one of my best long term choices. Knowing that this stock is in the middle of a debate between bulls and bears I decided that it would be interesting to give some reasons why I believe in this stock over the long term, what risks I see that could hurt the investment and that every investor should be aware of.
What can we say about Q1 09 Earnings?
The revenue was above the consensus but the bottom line was well below the consensus. Of course, the bottom line is the major element that the street looks at. But if we dig into the reason why the bottom line disappointed, we can see that it is mainly due to write offs (especially the SilPro bankruptcy that occurred in France). If you take only the operating performance, they were in line or even better than expected. We can expect that we shouldn't see further write downs like SilPro in the future.
Now, Evergreen provided cautious outlook about Q2 and said they could produce up to 30MW but don't expect to fully sell that level of production and therefore they will adapt their capacity to what they expect to be the demand. We can see two elements out of this outlook : Q2 is getting better than Q1 in term of sales but it is still a tough situation for the solar industry. But it also feeds the feeling that the second half of 09 will mark the real reversal of the industry and the demand (along with a better credit market).
Risk and Negative news around Evergreen Solar
Evergreen Solar is in the Solar Business and we know that over the long term this industry will have a tremendous growth, but the short term outlook is still very tough, mainly due to the credit environment. We need to be aware of some of the major risks this solar company is facing:
- General Risk: Strong slowdown in demand that persists because of a credit market that failed to restart at a quicker pace than expected. This has an impact on the entire economy and not only on Evergreen Solar.
- Pricing pressure from Chinese manufacturers: This pressure is persisting because of the inventory clean up, but according to many CEOs of solar companies (both in China and the US), we are at the end of this process.
- Short term liquidity: This is the biggest risk that Evergreen Solar is facing - will they be able to fund their development or do they face bankruptcy risk? While we cannot totally ignore bankruptcy risk, the probability is very low in my opinion. I believe that because their cash in hand right now is enough to fund their business for the next month, and they have announced they will soon raise 100 million dollars to invest in their development. We do need to see how they will raise this money. I guess with the big push toward renewable energy and also the clear support from the State of Massachusetts (where ESLR is located), I do believe they will be able to raise the capital they need to continue their development.
Also, we shouldn't discount their technology advantage that should help them stay alive without going through bankruptcy. We also have to take into account the strong backlog of contracts they have (between $2.8 and $3.2 billion of backlog, and so far there is still NO cancellation). Also, the financial commitment the subcontractor in China is planning to use with their agreement with Evergreen Solar makes me believe that the financial situation of Evergreen Solar doesn't worry them.
- Cancellation on their backlog contract: So far there is no cancellation on their backlog contract. But we still need to monitor that because it could have a serious effect on the company.
- Sovello commitment: Evergreen Solar has a commitment (as shareholders of Sovello) of several million euros over a loan agreement with a group of banks in Europe. If Sovello fails to face their obligation, Evergreen Solar would have to provide cash to the group of banks. Well, we need to be careful about this, but the probability seems to be low. Sovello had a loss last quarter (like most Solar companies) but they have been profitable before and should get back to profitability in the next quarters because they have great margin control and a strong customer base. But we still need to look at it carefully. In fact, if solar demand falls or doesn't stabilize, the commitment could be under danger. But so far it wouldn't fit with the forecast of Evergreen Solar (which sees a strong demand in Q2 in comparison to Q1) and also with the outlook of all other Solar companies that saw little pickup in March and early April.
- Failure in the finalization of a Subcontractor deal: On the earnings call, Evergreen Solar also announced they have a subcontrator agreement with a Chinese company to develop their capacity of production. They also said this agreement should be finalized within 90 days after they met several legal and administrative requirements. The management seems very confident about it, but until it is signed we have to be careful about it.
I think I have summed up most of the risks around Evergreen Solar. If you'll notice, most of these risks are short term. We do need to be sure they will pass through the credit crisis and be able to capitalize on the long term growth of the sector.
Now here are the reasons why I like Evergreen Solar, and why I believe they will become a major player in the solar field when the prospect growth of demand will occur along with the flow of credit in all projects:
- Quad String Ribbon technology: The Wafer is the major cost of a solar panel and Evergreen Solar has the best technology in the business in terms of Wafer Production. Their proprietary technology allows them to use 50% less polysilicon than competitors. This cost advantage makes a big difference on the growth margin. Before, this cost advantage was somewhat offset with the labor cost in the USA at the Devens Facility, but now with their subcontractor deal, the Labor cost will also be in line with most other Solar companies and their Wafer cost advantage will make a major difference. Based on their forecast (that is realistic), Devens should be able to produce panels at an average cost of $1.8 to $2/w at full capacity. Through their subcontractor, panels built in China should be at a cost of $1.30 to $1.50/w and could fall as low as $1/w in 2-3 years. If you consider, due to the grid parity, that the lowest price solar panels could be sold (without State subsidy) would be $2/w in 2-3 years, we are talking about a potential growth margin of 30%. Now, if you include State Subsidy that could increase the minimum selling price in a normal economy to $2.60 to $2.90/w, you get an even better growth margin.
- Brand value: Evergreen Solar has the best warranty in the industry, they guarantee 100% of the watt capacity of their solar panels, whereas most in the business guarantee 95% of the watt capacity. This means that when a customer buys a 100w Panel from Evergreen, they have the warranty that it will produce 100w, whereas if they buy this panel from a competitor, their warranty will most likely work only if it produces less than 95w. So when you buy Evergreen Solar panel you get the watt you expected to get.
- Marketing team: When you look at the very solid backlog of Evergreen Solar and also the fact that it is spread all over the world (Europe, Asia, USA) it is a proof that the company has a very strong marketing and sales team. This is a very solid advantage over the long term when the solar demand will strongly grow.
- Subcontractor contract and Devens Facilities: Evergreen Solar will produce panels in the USA, those panels will probably be directed to the US Market. The fact that the production is local should help the sales of their panels in the US at a very solid price, which should allow them to keep a solid margin out of Devens. Panels that would come from their subcontractor in China will be directed to China and also the rest of the world. Their great cost structure in Asia should allow them to fight with a solid growth margin on the price war outside the US.
- Support of the State of Massachusetts: Evergreen Solar is the major Solar company in this state and has the full support of the state government. In a government that pushes renewable energy, this strong support from the state can only have a positive effect over the long term.
- Customer relationship: Evergreen Solar has a great customer relationship with their clients and it allows them to have a good ASP (compared to the competition) and also strong backlog and a no cancellation backlog. This great relationship with their customer will be a long term advantage to keeping them and attracting new ones.
- Polysilicon supply: DC Chemicals is a major polysilicon producer, and it is a major shareholder in Evergreen Solar. It will provide a strong advantage over the long term for polysilicon supply and price as DC Chemicals, as a shareholder, has an advantage to seeing Evergreen Solar with good margins.
- Potential new contract: Evergreen Solar has a great relationship with SolarCity, who said they recommend only First Solar (FSLR) and Evergreen Solar panels to their customers, so they are well positioned in the residential market in the US. Also, the utilities business should provide strong growth with their last agreement with RMT. They already indicated they are in an advanced bidding process with some solar projects.
- Solar Growth: The overall solar growth over the long term can only have a positive effect on Evergreen Solar.
- Sovello IPO: Even if over the short term there is the financial commitment risk that we mentioned above, Sovello is a strong player in Europe and should generate solid revenues that will directly go to the bottom line for Evergreen Solar when the market picks up.
- Backlog contract: $2.8 billion to $3.2 billion of backlog contract is a solid long term revenue potential for Evergreen Solar and it proves also the quality of this company product.
Evergreen Solar is a solar company that is having some short term issues. But we cannot also ignore their great technology and brand advantage they have over the long term.
We need to be sure that Evergreen will stay alive through this crisis. I do believe they will, but we shouldn't ignore all the risks I mentioned above. I think for the long term investor, picking up some of their stock should be a good bet. Even if I have to admit they better wait to see how the $100 million cash raise will impact the company stock (will they dilute the stock or not?). But even after a potential dilution, Evergreen Solar still looks attractive over the long run. They should be a major player in the Solar business and thanks to their Wafer technology they should be able to also compete with Thin Film competitors (First Solar is the leader) and offer great growth margins and potential profits over the long term.
Evergreen Solar is definitely a very interesting pick for a 5 year long term investor, and the actual stock price isn't a proof that the Company will disappear or won't strongly rebound. Just look at the 2000-2007 graph to understand that the all time low isn't 1 (which is the 52wk low) but it was around 0.5 (in the middle of the Nasdaq crisis) and even with that the company rebounded strongly, whereas the solar demand wasn't as big as we all expected in the coming years.
Disclosure: Long on ESLR and FSLR and my customers are also long ESLR and FSLR
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This article has 36 comments:
But don't underestimate the risk part of Evergreen Solar. ESLR is subject to a lot of short term pressure but if they manage to pass it, i think the long term is very very positive
On May 04 07:50 AM Jerry Fiske wrote:
> Thank you, it's been a long time since I have read such a positive
> long range outlook on Evergreen Solar. As a small investor it was
> encouraging to here. Thank you for you comments. Jerry
Concerning the Lehman story, the dilution of the extra shares that was offer to lehman is already priced in the stock (It happened in October). The CFO has been very transparent on that story (he even hold a press conference with Q/A right after the Lehman mess, whereas JASolar the chinese company involve in it too, didn't hold any press conference as far as i know).
Concerning the CEO,
i would like to point out many stuff concerning what you say :
- Capital raise from Lehman was a bad decision ? Did you expect Lehman to go bankrupt in June ? I don't think so, so did most of the market, only shorters and naked shorters expected that.
- Concerning contract cancellation, we will know that only at earning times, but so far no cancellation (question has been asked about it and it has been confirm, if any cancellation happened they would have to disclose it).
- I agree with you about the fact that now they decide to outsource in China which is the right decision to do. But i see also the business model point at the beginning behind Devens. They wanted to develop a All in one strategy, but the crisis (with the cost combination) didn't work the way they wanted. Now it looks like they would move to a Wafer producer with outsourcer for Cell production, i think it is a perfect move. Devens will produce for the US Market, which is also a great move to attract interest for "Local Product" in US.
- Concerning the 100$millions raise, i agree with you, there is a serious risk of dilution (entire amount or part of the amount ? the company can take on debt but will they have the opportunity ?). But even if you take into account the dilution, the company has a great long term potential (if they make it through the crisis) and therefore the effect of the dilution won't have weight too much on the overvalue on the long term for today shareholders.
- the CEO probably did serious mistake too but the overall management is still solid (Marketing, Sales, CFO etC..) and the reputation of the brand is still very solid which proves that the CEO didn't destroy to value of Evergreen Brand (which is very important).
I think the main risk is just : Will they raise 100million$ easily or not (SPWRA had no issue to raise 400M$ but it doesn't mean ESLR will make it easily).
On May 04 08:51 AM John Cordes wrote:
> The biggest short term risk to Evergreen is the CEO. If the contract
> backlog was under attack for cancellations and renegotiations, the
> share holders will find out after the fact. Here is someone who
> "lent" Lehman Bros. 30 million shares to short in exchange for an
> extension of credit facility during the worst contraction last year.
> To my knowledge they still have not re-acquired these shares as they
> were denied under bankruptcy proceedings. Evergreen expands capacity
> at Devons by a factor of 5 then turns to China to average down costs.
> It tool a long time for me to see a pattern, but I finally got it.
> Macro conditions can improve dramiatically for solar but Evergreen's
> CEO will find a way to tank the stock. The transparency only comes
> after the fact when the shareholders are screaming for explanations.
> I can also assure you that there will be dillution in order to raise
> the $100million. Conceptually a great business, good proprietary
> technology, good sales force, horrible CEO.
It should help them decide whether or not the ESLR stock is to speculative or not for their individual taste. As a long term investor I have dealt with each of the negative issues as they have unfolded over the past year. My personal opinion has remained constant in believing the eventual ROI is well worth the risk. Solar is a tremendous growth industry in it's infancy. Evergreen not only produces a premier product but meets the stated national goals of the current administration of creating good jobs, protecting the environment, and achieving energy independence. Once again, thank you for your comprehensive and fair look at Evergreen Solar.
I think that most of the washout has been done in the Solar industry (mainly in China were they were too much player (very small player) most of them went bankrupt and created this big downside pressure on spot price (to clean inventory)). I think now, the game is to pick those that differentiate themself on (at least) :
- Technology
- Cost Structure
- Brand recognition
- Sales forces
- Quality of product
On May 04 10:37 AM sapereaude wrote:
> Well-reasoned exchange of opinion and fact. Any alternative energy
> company is a long-term investment today, as were railroads in 1830,
> electrical and telephone companies in 1880, and drug companies in
> 1920. There will be washouts--consider that over 1,000 automobile
> manufacturers rose and fell in America before we got down to the
> Shrinking 3.
Technology – all the modules pretty much look the same and assemble the same (I’m talking rooftops, not large utility installations in the desert). There is new module technology on the horizon but it’s not on the market yet.
Cost Structure – financials tell the story. FirstSolar is cheapest for utility-scale ground mounts. Low cost Chinese producers are cheapest for rooftop crystalline modules. Evergreen’s move to produce in China means that they’ve come to this same conclusion.
Brand Recognition – there are only two brands that Mr. & Mrs. customer have ever heard of: Sharp and BP. SunPower has done a good job to build a solar brand, but Sharp and BP area already there with well known brands. Sharp is universally respected. BP makes good gas and is a highly profitable oil company – a decidedly mixed message for solar customers. Jump ball among SunPower, Kyocera, Suntech, Yingli, Trina, Evergreen, etc. CA market share data gives a good picture of bestsellers for both commercial and residential installations (brand matters for residential, not for commercial).
Sales Forces – all the module companies canned their sales forces in 2005 when they shifted to an order-taking mode. Starting in 2009 when prices collapsed all these same companies are hiring marketing people to try to figure out how to differentiate their products so that salespeople can sell for a reason OTHER than lowest price. I’m an installer — I just buy what’s cheapest (and still performs well) from a reputable company that has good potential to be around to honor their warranty.
Quality of Product – it’s pretty much all the same. Really. That’s why the industry sells on a $/watt basis (would you buy a car based on $/hp?).
On May 04 11:16 AM Gregory Pepin wrote:
> The reference to the early age of automobile and other industry is
> pretty accurate.
> I think that most of the washout has been done in the Solar industry
> (mainly in China were they were too much player (very small player)
> most of them went bankrupt and created this big downside pressure
> on spot price (to clean inventory)). I think now, the game is to
> pick those that differentiate themself on (at least) :
> - Technology
> - Cost Structure
> - Brand recognition
> - Sales forces
> - Quality of product
>
ESLR's first-quarter net loss widened despite increased revenue, and margins were crushed by lower prices. Without extremely expensive n.gas (which has a glut, as well), the solar sector has too much silicon supply to match reduced demand. ESLR in particular has very high fixed costs, even after shutting a line. Unless silicon prices rise, their competitive advantage may not be one at all.
Since I hold ESLR, I hope I am wrong.
On May 04 01:21 PM TeaLeaves wrote:
> <snip>
> Stoops. I've been listening to Evergreen conference calls for many
> years and am impressed with the way Feldt has resisted pressure from
> analysts to maximize margins at Marlborough for the sake of short-term
> results. Rather he has used Marlborough primarily for R&D in
> the interest of long-term results. That's what good CEOs do. To
> fault him for subcontracting in China after expanding in Massachusetts
> is to make a vice of adaptability. Strength of management is one
> reason I'm sticking with Evergreen.
I've been long on them for about years. I agree with your point. I'm pleased with the way the Lehman debacle was transparently handled and with the Marlboro->Devens plan and process.
I don't want to invest in someone that manages to short-term stock price. I want one that manages for the long-term results.
I'm willing to wait and willing to take shares from others when we have the (un)expected pull-backs.
HardToLove
On May 04 01:43 PM 31October wrote:
><snip>
> ESLR's first-quarter net loss widened despite increased revenue,
> and margins were crushed by lower prices. Without extremely expensive
> n.gas (which has a glut, as well), the solar sector has too much
> silicon supply to match reduced demand.
Keep in mind that nat gas is now being "shut in" as prices prevent profitable operations by many. Prices will eventually rise, productioin will rampo up, glut will develop, shut-in will occurr, ....
Rinse and repeat.
> ESLR in particular has very
> high fixed costs, even after shutting a line. Unless silicon prices
> rise, their competitive advantage may not be one at all.
> Since I hold ESLR, I hope I am wrong.
Their pursuit of the sub-contractor agreement in China will help alleviate this issue. Plus, don't forget that with their *current* technology, they have a 20% cost advantage (poly consummed) over others. With the lower labor costs engendered by the sub-contract, they should come out just fine.
Long (and getting longer) ESLR.
HardToLove
In 2008, 88 MW of commercial systems were installed and 42 MW of residential systems were installed. I expect that residential is about 33% (not <3%) of the market in the rest of the U.S.
Grid parity will happen first on residential rooftops -- that's where electric rates are the highest. And that is where Evergreen has the best chance of success, especially when they get their costs down with low cost manufacturing.
On May 04 02:56 PM Steve Pluvia wrote:
> Wow, long article that avoids the elephant in the room -- INSTALLED
> COST PER WATT. Write it on your forehead. Ignore everything else.
> If Evergreen does not have a cost competitive advantage that allows
> them to sell panels profitably between $1.80-2.00/watt in the next
> 12 months they are in BIG trouble. Several technologies are ramping
> thin film [Solyndra, Global Solar, Nanosolar, Miasole Sharp CIS],
> all of which will be able to sell and thrive in this price range.
> I do not see Evergreen as a viable technology. No evidence they
> can compete with Chinese c-Si and they have NO chance of competing
> with emerging thin film and FSLR.
>
> And don't waste time with the residential rooftop foot print argument.
> Its garbage. The largest solar installer in the USA sells more thin
> film FSLR than c-si panels, [its about cost stupid] and residential
> represents less than 3% of the market.
On May 04 12:34 PM sierranvin wrote:
> CEO lends 30 mill shrs to Lehman to SHORT HIS OWN COMPANY'S STOCK???
> How about lending a morbid photographer sitting alongside the tank,
> several buckets of chum before you, the lender, go swimming in a
> tankful of sharks? Yes, he's a real visionary, and clearly a bulldog
> for shareholder interests!
Their String Ribbon technology that lower the cost of Wafer (add with the subcontractor agreement in China) allow ESLR to have one of the best future cost structure in the business to be able to sell their panel at 1,8 to 2 $ /w if needed. Now take into account that grid parity in most market is 2$ /w without subsidy (so you can increase the price with the subsidy).
Concerning FSLR, they have a great (the best) cost structure in the business, but they are perfect for big project not small (due to conversion issue) and also you have to take into account the extra cost of installation (30c/w). labor cost in china + String ribbon technology should allow ESLR To compete with them too
If they resist to the actual short term pressure
On May 04 02:56 PM Steve Pluvia wrote:
> Wow, long article that avoids the elephant in the room -- INSTALLED
> COST PER WATT. Write it on your forehead. Ignore everything else.
> If Evergreen does not have a cost competitive advantage that allows
> them to sell panels profitably between $1.80-2.00/watt in the next
> 12 months they are in BIG trouble. Several technologies are ramping
> thin film [Solyndra, Global Solar, Nanosolar, Miasole Sharp CIS],
> all of which will be able to sell and thrive in this price range.
> I do not see Evergreen as a viable technology. No evidence they
> can compete with Chinese c-Si and they have NO chance of competing
> with emerging thin film and FSLR.
>
> And don't waste time with the residential rooftop foot print argument.
> Its garbage. The largest solar installer in the USA sells more thin
> film FSLR than c-si panels, [its about cost stupid] and residential
> represents less than 3% of the market.
Now to point out to your precedent comment. As far as i know, the warrant for ESLR is one of the best in the business and i know that they have a very solid reputation in Germany and France. I guess it is the same in the US (i saw an article where solarcity recommend ESLR).
On May 04 04:12 PM rooferguy wrote:
> The California Solar Initiative publishes good data on all systems
> sold and installed (CA is about 75% of the total U.S. market).<br/>
>
> In 2008, 88 MW of commercial systems were installed and 42 MW of
> residential systems were installed. I expect that residential is
> about 33% (not <3%) of the market in the rest of the U.S.
>
> Grid parity will happen first on residential rooftops -- that's where
> electric rates are the highest. And that is where Evergreen has
> the best chance of success, especially when they get their costs
> down with low cost manufacturing.
>
>
But I do know the solar business in the U.S. pretty well.
Commercial was 66% of installations in the U.S. (you can check the primary research from the CSI, not secondary report summaries taken out of context). Other states have similar percentages; they're certainly not zero as your calculation implies.
Grid parity happens first where the combination of net (after incentive) costs are low and electric rates are high. That means residential rooftops in Hawaii, California, and several east coast states.
Check out this study from Ryan Wiser at Lawrence Berkeley National Labs: www.solarplaza.com/rep...
The variation in installed system cost by size of system is not very big. Variation in electric rates is much more significant. Hence grid parity comes first for residential, next for commercial, and last for utility central station solar.
Evergreen's technology competes most effectively in the residential and commercial markets.
As far as grid parity, please don't tell the people in Hawaii who were paying $0.40/kwh in 2007 and got lots of sun. And CA at $0.30/kwh. Remember, grid parity compares two numbers: LCOE for solar and grid price. So places that have high grid prices get there first.
OK, you're right. Maybe they all got to grid parity in 2008. Or now. So what? ROIs for space-constrained installations favor high efficiency crystalline, not thin film modules. Evergreen is making the right moves now.
I like the name "Rufus." And being an "American."
home.comcast.net/~bpayne37/pnmelectric...
so far.
Also no response to
www.prosefights.org/nm...
so far.
Thank you for not slamming me this time. Now I'm just a little bit less confused. For the next 5-10 years while Si is inexpensive I still believe that crystalline will be the market leader on all space-constrained applications. FirstSolar will do fine in the desert (the other thin film companies aren't shipping in commercial quantities). My rooftop religion is crystalline and I'll stick with it until I see another God that works better.
FSLR is performing well in Solarcity business right now because of pricing issue. But with a better credit market, people will probably be more open for ESLR product (or crystalline panel in general). FSLR is a great product but more for big project where there is large space to install panel due to their conversion percentage.
Rooferguy will correct me if i'm wrong because he seems to work in this business, but roof of Residence (or even garden of residence if they install their panel their) isn't big enough to make FSLR panel attractive for them.
On May 04 05:12 PM Steve Pluvia wrote:
> Wrong Again. The largest installer in the USA [SolarCity] sells
> more FSLR panels than c-Si. Its all about cost stupid, if you actually
> calc'd the space needed for both systems you'd realize how stupid
> your claim is. Its cost stupid. Repeat that to yourself over and
> over or you're going to KEEP getting the PV story wrong.
>
> As to your other claim -- you have provided zero evidence Evergreen
> can cost compete with Chinese produced c-Si which frankly can't cost
> compete with thin film PV. You're simply hoping that's the case.
> Bad move.
>
> ***Concerning FSLR, they have a great (the best) cost structure in
> the business, but they are perfect for big project not small (due
> to conversion issue) and also you have to take into account the extra
> cost of installation (30c/w).
You financial dudes know a lot about stocks. Rufus, my new nom de plume, knows a lot about solar because I'm actually selling it and installing it.
Steve,
I would like to point out the fact that FSLR has a lower efficiency then ESLR so to produce the same amount of electricity you need more space which isn't what you have on residential roof.
In fact FSLR is selling their product with a price that isn't that big of difference with crystalline producer but the big difference is on their growth margin.
Anyway, everyone has their own point of view :) that's how the market works
On May 05 10:58 AM Steve Pluvia wrote:
> George,
>
> Wrong Again. Why do you write articles on subjects you clearly don't
> understand?
>
> Not only is it clear you don't understand the key metrics of the
> solar industry, your comments defy basic business logic. Nobody
> pays $10,000 more to install a ESLR system when they can get the
> same performance [better actually as FSLR performs better in lo light]
> from a FSLR system. Evidence this is the case includes the customer
> selection between FSLR and c-Si in of 70-30, where 70% of sales are
> going to FSLR.
>
> On May 05 03:48 AM Gregory Pepin wrote:
Also Rooferguy, do you know the warranty of FSLR ? how is it ?
On May 05 11:59 AM rooferguy wrote:
> George - you're absolutely right about FSLR not working on residential
> roofs. SolarCity sells that product because FSLR gave them $25m
> in return for product -- not because that's what customers want.
> ESLR is a much better deal for residential customers than FSLR.
> You can put 50% more solar on the roof for the same fixed project
> costs, which is critical since rooftops are space-constrained. Among
> residential and commercial installers, especially out here where
> it's cold and snowy sometimes, thin film never pencils out compared
> to crystalline.
>
> You financial dudes know a lot about stocks. Rufus, my new nom de
> plume, knows a lot about solar because I'm actually selling it and
> installing it.
But let’s run with your numbers for now. The 7000 watts of output is a good calculation for the 10.4% efficient FirstSolar panels you love. But the 15% efficient Evergreen panels will put out closer to 10,500 watts (these are all DC ratings) on the same roof. If I were to put that system on a south-facing unshaded rooftop in one of the solar friendly east coast states (lets use numbers for Newark), the FirstSolar system would produce 8,400 kwh/yr. 8400 kwh/yr in Newark works out to a monthly electric bill of about $100. Real bills are higher than that, especially with AC. Evergreen’s system would produce 12,600 kwh/yr, more like $150/month.
Now here’s the kicker, and pay close attention. The installation labor for the two systems is THE SAME, but you get 50% LESS POWER. Same number of inverters. Same engineering and permitting costs. Same amount of rooftop labor. Same number of building, utility and electrical inspections. The wiring for the FirstSolar panels costs more (heavier wire is needed since they operate at higher voltages), and the rooftop racking is slightly more complex. It’s not relevant that thin film ostensibly puts out more energy in low light conditions since in those same conditions the inverters don’t have enough current to turn on.
You’re right, the FirstSolar panels are cheaper than Evergreen. But when the installation labor and fixed costs are considered for residential rooftops, thin film panels provide inferior economics. The economics for thin film get worse on smaller roofs (which are more typical). The only reason SolarCity installs them is because FirstSolar invested $25m in SolarCity (they paid SolarCity), and SolarCity committed to buy 100 megawatts of panels from FirstSolar.
Roofer Guys like me have been able to buy thin film panels for years. But we don’t since our customers always want to generate the most power they can on their space-constrained rooftops. The economics are significantly better for crystalline on smaller systems. Put solar in the desert and thin film wins....for now, at least until Evergreen gets their production going in China using cheap silicon. On rooftops it’s crystalline all the way, baby.
You're only argument is the price of the panel himself (you don't take into account, the efficiency, the size, the duration, the warranty, the area, the labor cost etc...)
No in your mind it is easy : less expensive for one panel means you need to buy it and no other panel. I m pretty much surprise then that FSLR doesn t have 100pct of the market. They should no Steve?
Anyway lot of respect for roofguy that tried to explain again and again at steve, but you better give up ;) i won't understand. he he he
Concerning the warranty roofguy, i just wanted to know if they guarantee 100pct efficiency or less?
On May 06 12:36 PM Steve Pluvia wrote:
> Idiot. There is no reason a more expensive product [ESLR] will get
> a "strong push". PV is a commodity, price always wins and ESLR cannot
> cost compete.
There is a FirstSolar data sheet at:
www.phoenixsolar.com/e...
From the data sheet, their warranty is:
Performance guarantee 10 years at 90% of the minimal rated power output*
25 years at 80% the minimal rated power output*
Thanks rooferguy.
So the assumption that ESLR (with their 100pct power output warranty) has the best warranty in the business seems more and more true.
As far as their power output, in the future it will be less significant as microinverters optimize the output of every module (the +/- tolerance won't matter since you'll always get the average output).
And then, to add insult to injury, a week later they file SEC documents showing a large distribution of stock awards to the self-same people who have managed the company's stock down to a sub $2 price. It is an outrage that both the management and the BOD is so grossly negligent in their fiduciary responsibilities.
Long term outlook aside, until Feldt and El-Hillow are replaced with competent managers, this company will be a perennial underachiever. That is, if it manages to survive.
On May 04 08:51 AM John Cordes wrote:
> The biggest short term risk to Evergreen is the CEO. If the contract
> backlog was under attack for cancellations and renegotiations, the
> share holders will find out after the fact. Here is someone who
> "lent" Lehman Bros. 30 million shares to short in exchange for an
> extension of credit facility during the worst contraction last year.
> To my knowledge they still have not re-acquired these shares as they
> were denied under bankruptcy proceedings. Evergreen expands capacity
> at Devons by a factor of 5 then turns to China to average down costs.
> It tool a long time for me to see a pattern, but I finally got it.
> Macro conditions can improve dramiatically for solar but Evergreen's
> CEO will find a way to tank the stock. The transparency only comes
> after the fact when the shareholders are screaming for explanations.
> I can also assure you that there will be dillution in order to raise
> the $100million. Conceptually a great business, good proprietary
> technology, good sales force, horrible CEO.
fyi- check the CEC site and tell my how evergreen modules compare to others regarding AC system efficiency--save you some time, evergreen's are one of the top 3 performers across virtually all inverter choices. That would be a clear competitive advantage that justifies a premium price per DC Watt (nameplate)
On May 04 04:12 PM rooferguy wrote:
> The California Solar Initiative publishes good data on all systems
> sold and installed (CA is about 75% of the total U.S. market).<br/>
>
> In 2008, 88 MW of commercial systems were installed and 42 MW of
> residential systems were installed. I expect that residential is
> about 33% (not <3%) of the market in the rest of the U.S.
>
> Grid parity will happen first on residential rooftops -- that's where
> electric rates are the highest. And that is where Evergreen has
> the best chance of success, especially when they get their costs
> down with low cost manufacturing.
>
>