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Dana Blankenhorn has been a business journalist since 1978, and a futurist all his life.He warned about the coming Houston oil collapse in 1979. He began making a living on the Internet in 1985. He launched the first e-commerce daily for CMP in 1994, warned of the... More
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  • Building Integrated Photo Voltaics (BIPV) Products Lack a Sales Channel  0 comments
    Jun 27, 2011 12:07 PM | about stocks: ASTI, STP, DOW, TOL

    There is yet-another big Building Integrated Photo Voltaic (BIPV)  start-up in the news.

    Pythagoras Solar, an Israeli start-up, says its solar cells, sandwiched in glass, can both lower heating and cooling costs and generate electricity, paying for themselves in 3-4 years.

    Pythagoras is private, but before you go rushing to your broker, waiting on that IPO, remember that BIPV stocks are regulars in the “penny stock” pages. I've covered such BIPV stocks as QSolar elsewhere, in industry publications, but I don't recommend any penny stock, and Seeking Alpha doesn't analyze them.

    I could only find only one pure play BIPV stock that is publicly traded, Ascent Solar. They are not focused on buildings, but on direct-sale applications like the military, autos, space, and custom manufacturing.

    By contrast Konarka Solar
    , whose Power Plastic is an interesting BIPV product, is privately held with $150 million invested.

    Suntech Power of China  has gotten into the BIPV market with solar shingles. But it is telling that Dow Chemical, which announced its PowerHouse solar shingles to great fanfare last year, has yet to release them to the market.

    Why has BIPV failed to launch? Distribution.

    BIPV should be a natural home improvement offering. But Home Depot and Lowe's only sell products that are in scaled manufacturing and generate their own demand. Creating that demand starts with a long sales cycle, high margins, and a lot of hand-holding.

    There are such businesses. They call on architects, on builders, on people who specify what will go into new buildings. It's a long, hard slog. They tend to be small and local.

    Due to the expense involved BIPV sales also depend on financing deals through companies like SolarCity , SunRun, and Trinity Solar.

    There are signs of distribution starting to gell, but it will take a few years to emerge in something you can invest in.

    The relative success of Toll Brothers, which created a “solar home” project called Toll Green with financing from SunRun last year, is one promising sign of what is to come. The growth of retailers such as Solar Home, which sell BIPV along with other energy-saving products, could also create a channel for the sector.

    But here is the bottom line. You can buy stock in a solar panel maker with confidence, knowing that there is a distribution channel available for their product. Until such a channel develops in BIPV, it will be difficult to buy the companies making the stuff.

    No matter how exciting their technology.




    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: I removed references to HSOL and also the bullet points. The current HSOL is not heavily into BIPV. I also added some other examples of BIPV companies and described how they are reaching the market.
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