Satcon Technology Corporation ("Satcon" or "Company") is a leading clean energy technology provider of utility grade power solutions for the renewable and distributed energy markets. We deliver power conversion solutions and system design services for large-scale renewable energy plants. Our products are utilized by businesses and utility companies to efficiently convert renewable energy sources into stable and reliable electrical power.
Our PowerGate® Plus suite of photovoltaic and fuel cell power inverters, which are sold through our Renewable Energy Solutions division, offer rugged and reliable solutions that enhance the total output and power production of the solar installation. We also offer system design services and solutions for management, monitoring, and performance measurement to maximize capital investment and improve overall quality and performance over the entire lifespan of the installation.
In addition to our core power conditioning solutions, we also develop, design and build power conversion electronics, power management and distribution systems for a variety of defense and commercial applications through our Applied Technology division.
Revenue Comparison with Prior Years
Industry Background & Market Opportunity
The worldwide demand for clean and renewable sources of energy, such as solar, is being driven globally by a variety of factors. These factors include increasing electricity usage, power grid capacity constraints, fossil fuel price volatility, and harmful levels of pollution and greenhouse gases. As a result of these and other challenges facing traditional energy sources, individuals, businesses and governments are seeking more reliable, efficient and cleaner solutions for their power needs through renewable portfolio standards (RPS), tax incentives, and international treaties.
Within this renewable energy market we believe that the fastest growth area for Satcon involves large-scale, utility grade renewable energy and distributed power generation. These solutions require power quality control products to manage the performance of individual solar installations and monitor how it will interconnect with larger energy infrastructure (grid). In order to be commercially viable and operate effectively, these solutions must be highly reliable, efficient, and deliver the command and control performance required to profitably manage multi-megawatt solar power plants. Our intellectual property, in the form of technical expertise and innovative product offerings, uniquely positions the company to provide the next generation of large-scale, utility grade renewable energy projects with the energy storage, power quality, and distributed power systems they will require.
We deliver a full suite of power conditioning solutions and services for large commercial and utility scale renewable energy installations through our two business segments: Renewable Energy Solutions and Satcon Applied Technology.
Renewable Energy Solutions (formerly Satcon Power Systems, Canada)
We produce a broad range of products to provide the critical bridge between clean energy sources and large-scale power grids, helping companies meet the rising demand for clean energy.
Our solutions for renewable energy consist of two core product offerings:
Utility Grade Inverters for Solar Photovoltaic and Fuel Cell. We develop modular inverters for use in connection with large, utility-scale, renewable energy power systems such as stationary fuel cell power plants, photovoltaic power plants, and distributed power generation systems. Our PowerGate® Plus inverters are designed to convert the DC power generated by a renewable energy source into useable AC power. They also provide the interface with the electric utility grid, an energy storage device, and end user applications. Our inverters are built on a proprietary technology framework that allows them to effectively manage high-power requirements. We introduced our first inverter product in fiscal year 2002.
Micro Grid and Smart Grid Solutions. Satcon's Micro Grid solutions supply stable, high quality renewable power locally, at the point of demand. Our utility grade Micro Grid solutions are developed to solve the renewable energy challenges of intermittancy and power storage and ensure the grid load is always powered. Built on an architecture of PowerGate Plus photolvoltaic, fuel cell and hybrid inverter systems, they provide uninterrupted utility grade renewable energy to deliver the energy security, reliability, safety, sustainability and cost effectiveness required for large scale utility adoption.
Satcon's Micro Grid solutions are the distributed renewable building blocks for the future Smart Grid, a large scale system of distributed command and control centers composed of a dense network of interconnected micro grids. In this design, Satcon Micro Grids become the Smart Grid framework , enhancing network wide quality and performance by localizing speed, control and intelligence through renewable power conditioning.
Other Legacy Power Products. We also provide static transfer switches, static voltage regulators, frequency converters and AC arc furnace line controllers from 5 kilowatts to 100 megawatts.
Applied Technology develops, designs and builds power conversion electronics, power management and distribution systems, for a variety of defense and commercial applications. We pursue development programs in areas where we have technical expertise and where we believe there is significant long-term production potential for the developed technology. Technical disciplines represented at our Applied Technology business unit include electromechanics, digital and analog electronics, power electronics and electronic packaging, thermal management, motor dynamics, materials, software development, control technology and system integration. To date, Applied Technology has built products for use in distributed power generation, energy storage and power quality, high performance electric machinery, transportation and defense systems, including components for military hybrid-electric vehicles, "all-electric" ships and aircraft subsystems.
Financial Results by Business Segment
Our financial results by business segments for the fiscal years ended December 31, 2008 and 2007 are presented in Note S to the Consolidated Financial Statements included in this Annual Report on Form 10-K.
Satcon Product Attributes
We strive to meet our customers' needs by providing power conditioning solutions and systems that encompass the following key attributes:
Performance. Our products use proprietary designs and technology to ensure that high-quality power is efficiently produced in all operating conditions.Reliability. We design and manufacture high-reliability, long-life power electronics for solar photovoltaic applications. We design, manufacture and test our systems for optimal performance over the entire lifespan of the photovoltaic system. We design our products to support the long-life, always-on requirements of the power quality markets through a comprehensive suite of programs including: support services, system design services, and warranty and preventative maintenance programs.
Efficiency. We design and manufacture our products to meet the efficiency needs of our customers as defined by their specifications and the end use of the product. The overall efficiency of a renewable power system, or its ability to deliver power with minimum energy loss, is vital to its effective commercialization and overall profitability dynamic, and depends on the efficiency of all of its component parts. Our proprietary maximum power production tracking (Edge™ MPPT) technology ensures that the entire photovoltaic system delivers maximum throughput in the harshest environments. Our products also are compatible across all photovoltaic cell technologies, including thin film, monocrystalline, and polycrystalline photovoltaic panels.
Quality. Our Renewable Energy Solutions division operates with Quality Management Systems. Our Applied Technology division is ISO 9001:2000 certified. All of the high power level inverters manufactured in our Renewable Energy Solutions division are Underwriter Laboratory listed as meeting their requirements for safety.
High Power Density. We design our products to meet the market demand for high power density. High power density, or the ability to convert, condition and manage large amounts of energy within a compact design, is required for cost reduction and is critical in applications such as large commercial and utility-scale solar photovoltaic power systems where environmental conditions are stringent.
Flexibility. We develop and manufacture our products for use in various renewable energy and power quality systems such as fuel cells, photovoltaics, wind turbines, micro-turbines and UPS systems. Our products are modular and scalable to meet a wide range of power requirements. Our engineers work closely with our customers to address overall systems design issues and to ensure that our products meet their system specifications. A close working relationship between the customers' engineers and our engineers is particularly important in the rapidly evolving renewable energy industry.
Sales, Marketing and Service
We sell our products and services through direct sales personnel, distributor arrangements and sales agent arrangements which comprise a global market presence for Satcon. Our direct sales staff manages our key customer accounts, regional distributors and agents, as well as, provides customer support and identifies significant market opportunities in their respective markets.
In order to maximize our customer's return on assets and investment profitability, we offer a suite of services focused on delivering optimized design and installation support. We also maintain localized customer service capabilities at sites throughout North America, Europe and Asia. Our services provide technical support throughout the entire lifespan of a product. We believe these factors are essential to building close, long-term value for our customers, and maintaining our competitive edge.
Within our Applied Technology division, we compete for and market our research and development contracts through several methods, including pursuing new and existing customer relationships in the commercial and government sectors and responding to unsolicited requests for proposals and through our Internet site.
Our strategy is to drive revenue growth, expand our leadership position in key markets, and enhance operating results by increasing the adoption of our products in the large commercial and utility scale renewable energy market. Our focus continues to be:
Leverage our diverse expertise and proprietary technology. We apply our diverse expertise and proprietary technology in the fields of power electronics and power conversion design to offer the industry's largest selection of commercial and utility grade inverters. Our products' advanced capabilities are highly differentiated in the rapidly developing renewable energy market where we currently offer the broadest range of utility grade power ratings ranging from 30kW to 1 MW. Our success should be sustainable in the longer term because it depends on fundamental knowledge of key power technology. We are not critically dependent on the technology of a specific application, the business of a single customer or the success of a single product. We strive to create balance between breadth and focus.
Establish our products as industry standards. We are a major developer and manufacturer of power electronics, power conversion and power conditioning solutions in renewable energy applications worldwide. We currently provide our solutions and services for the largest and most demanding solar installations in the world. We come from a history of innovation in large-scale, advanced solutions including introducing the world's first one box 100 kW photovoltaic inverter, the first 500 kW photovoltaic inverter, as well as the first 2.4 megawatt fuel cell inverter. In 2008, we introduced the first 1 MW photovoltaic inverter. Our innovation and history of firsts position our products as industry standards in the large commercial and utility scale renewable energy market.
Leverage our intellectual property. Satcon is composed of industry leading experts in large-scale photovoltaic and fuel cell design, manufacturing and solution delivery.
Develop new technology. We believe that new products, manufacturing capabilities and technologies will enhance our competitive position and growth opportunities. In 2008, we were recognized by Sandia Laboratories to develop the next generation of distributed renewable energy solutions through the Solar Energy Grid Integration Systems (SEGIS) project. The SEGIS project is focused on developing advanced clean energy technologies required to increase the usage of photovoltaic systems in the energy network, and improving the power quality and reliability of the overall utility grid. The combination of our advanced technology, intellectual property and industry expertise provide us the opportunity to develop the industry's next generation of power conversion solutions.
Develop strategic alliances and relationships. These alliances may take the form of marketing, sales, distribution or manufacturing agreements. We continue to expand and deepen our operations globally and we are committed to establishing a large, direct local presence in the European and Asian countries where we plan to compete, as well as maintain and build upon the strong relationships we have in North America.