zawy

Total Rating:
0 / 0

85 Comments

    • Thu Apr 24th 08:11 AM | Rating: 0 0
      Commented on:
      When Will Solar Achieve Grid Parity? We're Already There!
      Jack, stop fudging everything! 24*0.71/6= 2.666 so solar is "almost 3" and not "a little over 2" times more expensive per W installed than for coal. The real competitor that investors should be interested in is nuclear which is 24*.9/6= 3.6 times more nuclear energy per W installed over solar W installed.
      View article »
    • Thu Apr 24th 08:05 AM | Rating: 0 0
      Commented on:
      Solar Power Will Be Transformational in the Next Decade
      Jack, you changed the input data to "prove" your point. We were talking about 13 cents/kWh and you're using a gracious "effective-effici... of 30 years instead of the standard 25 years. A 3rd source of fudging is that you didn't do APR correctly. Even with your gracious 30-year effective-efficiency-l... monthly payments would be $60, so the rate is 16.4 cents/kwh instead of 15.

      If you'll look at my comments, you'll see that i similarly found that $5.4/W is break even for 7% loan and if electricity costs rise 3% a year and if we can get a interest deduction, so we're not really in disagreement. I just want the math and assumptions to be correct and precise. Being off just 1 cent/kWh over 30 years is $3,900 on a 6 kW system (about $2000 in today's dollars when adjusted for inflation).
      View article »
    • Wed Apr 23rd 16:27 PM | Rating: 0 0
      Commented on:
      When Will Solar Achieve Grid Parity? We're Already There!
      Jack, I got lucky and found a reference. It says coal operates at 71% of capacity and nuclear operates at 90%. 71% of 24 = 17 hours, almost 3 times more than solar cells in a 6 kWh/d/m^2 area.

      www.geo-energy.org/pub...
      View article »
    • Wed Apr 23rd 09:15 AM | Rating: 0 0
      Commented on:
      Solar Power Will Be Transformational in the Next Decade
      Your article doesn't take into account the upfront costs when calculating payback. You assume banks will give out 0% loans on the initial $30K investment, or that rich people who can afford the upfront costs are satisfied with 0% return on the investment. If electrical grid energy costs increase 3% per year and you or your bank are satisfied with 7% return on the $30K investment, you have to use a 7%-3%=4% depreciation factor. In this scenario, the $4.5/Wp installed costs you propose in a typical 6 kWh/day/m^2 location (this includes clouds!) at today's 13 cents/kWh, it will barely break even over the 25 year "efficiency-effec... lifespan of the solar cells. If it's in a new house where you can depreciate the home interest expense and are in a tax bracket of 25%, then the depreciation factor is 7*0.75-3=2.6% then payback can occur at $5.4/W installed which i believe is very doable.

      There is no simple energy storage solution. The raw materials in EEStor supercapacitors cost $10/kWh, about 50 times less than current generation lithium-ion. See BCON for 10-hour energy storage with 25-year lifespan that could cost less than $1/kWh. Even at $1/kWh, storing half the energy of Jacks $30K, 7kW system in 6kWh locations will cost 7x6/2= $21K. Flywheels with carbon nanotube technology ($4/pound in 5 years) could solve the energy storage problem. They use vacuum and magnetic floating to keep 80% of the energy for 12 hours. Currently used in energy storage for cranes, trains (start/stop regeneration), and telephone systems.
      View article »
    • Tue Apr 22nd 13:16 PM | Rating: 0 0
      Commented on:
      When Will Solar Achieve Grid Parity? We're Already There!
      It has been clearly demonstrated and backed by FSLR comments that solar is not competitive with coal or nuclear until installation costs have reached $1.5/Wp. The biggest error in your article is that you seem to equate a solar Wp with watts. Over the 25 years or so for a solar system, there is only 6 kWh/day for each 1kWp installed in sunny locations whereas a coal or nuclear plant is producing 24kWh/day for each 1 kW installed. So first you need to multiply your solar costs by 4 to be comparable. Then consider nuclear plants last 40 years and cost about $3/W installed, which is 2 times cheaper than $1.5/Wp of a solar installation since
      1W = 4 x 1Wp
      In other words, you have to install 4 Wp of solar to get the same output of 1 W installed of coal or nuclear. Then consider nuclear lasts 60% longer. These advantages are offset by the fuel, disposal, regulatory, and maintenance costs of nuclear. In short, it has been well-documented that $1.5/Wp installed solar is equal to 5 cents/kWh in sunny locations and assuming 25 year lifespan and 5% loan on the capital costs. 5 cents/kWh is the same costs utilities get from coal and nuclear, using the same 5% loan scenario.

      Coal puts out far more radiation than nuclear. Nuclear plants can be built in 4 years, at least outside of the U.S.
      View article »
    • Mon Apr 21st 12:24 PM | Rating: 0 0
      Commented on:
      First Solar Now in Its Third Leg Up
      Judging from the last immediate 25% increase after last earnings report when there was a 50% surprise, the near-100% surprise this quarter should see 25% again. There's been another 25% since the initial surprise-increase meaning a mere 50% surprise may already be factored in.

      The first equation used not adjusting for exchange rate as a way of being conservative. They expect new facility build costs to be maybe $30M higher this year which can decrease profit 7% ish. The second equation adjust for the better exchange rate.
      View article »
    • Mon Apr 21st 09:53 AM | Rating: 0 0
      Commented on:
      First Solar Now in Its Third Leg Up
      How is it in the least bit sane for the HIGHEST estimate for the current quarter to be 20% lower than the last quarter in a high-growth company, and when the exchange rate has improved the outlook by 1.47ish/1.39 = 5%? If production increased the expected 20%, it all adds up to 0.77*1.05*1.2 = 0.97, a whopping 54% above the HIGHEST estimate.
      View article »
    • Mon Apr 21st 08:38 AM | Rating: 0 0
      Commented on:
      First Solar Now in Its Third Leg Up
      How much share dilution potential is there? Especially if they need to double number of plants by end of 2010 to keep up production growth. Has there been any word on new plants after the Malyasian plants are complete in 2009?
      View article »
    • Mon Apr 21st 08:01 AM | Rating: 0 0
      Commented on:
      First Solar Now in Its Third Leg Up
      It appears from the 10-K that they were capable of producing 77 MW in 4Q 2007 but net from sales was $111 M which means 111/77 = $1.43 net /Wp instead of $1.3ish/Wp due to favorable exchange rate. Exchange rate was 1.3 then 1.39 in 4Q, and now is 1.57.

      I can't tell you quarter to quarter because of when lines come on and the financial calculations include all kinds of quarterly variations. The biggest in this case is exchange rate and tax. To turn the question around, if they made 0.77 EPS in 4Q 2007, why in the world should 2008 not be at least = 4*0.77=3.08? Was there an accident in 4Q 2007 that will not continue to occur?

      Please note that the guidance in the summer of 2007 predicted for 4Q 2007 the following:

      77MW*1.3profit/watt / 80M shares = 1.25 EPS before taxes etc. 0.77 EPS actual was not a surprise at all. The estimates seems to be based on disbelief instead of reality, or the estimators are trying to force surprises for personal gain.

      4Q 2007 seems to be stabilizing towards an accurate picture of expenses giving 31.5% net/gross sales (after taxes and everything), which is 56.8% overall net/(gross sales-cost of sales). They claim to be able to maintain sales profit/W, but I'll assume the $1.44 profit/W was an exchange rate and production anomaly and use a more conservative $1.2/W.

      EPS=64MWp 4Q 2007 * $1.2 profit/Wp * 0.568 income/profit * 1.195^N / 81 M shares

      Where 64MW 4Q 2007 comes from curve fitting 2007, 2008, and 2009 production: 201MW, 396MW, and 836MW. 77MW was the actual for 4 Q 2007. N is number of quarters past 4Q 2007. 1.195 is the quarterly 19.5% growth from the curve-fitted 104% yoy growth: (1+1.04)^1/4 = 1.195. 104% yoy growth is a slowing of the previous 5-yr 167% yoy growth trend.

      The equation gives:

      EPS 4Q 2007: 0.54
      (lower than the actual 0.77 because of curve-fitting approx of production and because actual profit/W was 20% higher due to exchange rate)

      1Q 2008: 0.64
      2Q 2008: 0.77
      3Q 2008: 0.92
      4Q 2008:1.1
      2008: 3.4
      1Q 2009: 1.31
      2Q 2009: 1.57
      3Q 2009: 1.87
      4Q 2009: 2.24
      2009: 7.0

      Assumes no more share dilution and conservative 1.3 $/Euro exhange rate instead of 4Q 1.39. At 1.39 exchange rate, increase numbers by 20%

      They have to announce this summer new production lines for a doubling of capacity by end of 2010 in order to have two years to complete plants to keep up the trend. Not keeping up the addition of new lines will be a crushing blow.

      Now backing up a little, there is another conservative number that takes the new exchange rate into account. Using the net/gross sales of 31.5% and assuming gross AND ALL COSTS (conservative) go up directly with euro:

      EPS = 64 MW 4Q * $2.4 gross/Wp * 1.57/1.3 exchange improvement * 0.315 net/gross * 1.195^N * 0.984^N

      0.984 is quarterly decrease in gross at contracts' -6.5% APR.

      EPS is 4.4 for 2008 and 8.4 for 2009.

      EPS for each quarter after 4Q 2007:
      0.85
      1.00
      1.17
      1.38
      1.62
      1.91
      2.24
      2.64
      View article »
    • Sun Apr 20th 16:29 PM | Rating: 0 0
      Commented on:
      First Solar Now in Its Third Leg Up
      So at these prices, the yahoo forward PEs should be 87 for 2008 and 40 for 2009, worst case scenario. The problem is if they can keep up the trend for 2010. I haven't read anything about new plants in the works after Malaysia.
      View article »
    • Sun Apr 20th 16:20 PM | Rating: 0 0
      Commented on:
      First Solar Now in Its Third Leg Up
      Due to how various things are calculated, there may be substantial variations each quarter. But the long-term (3 yr+) of yearly profits should be very reliable. As a minimum, 2008 will see 380 MW sold for $2.3/W at 30% net income which gives 380M*2.3*0.30/80M shares = $3.3 EPS. This is much higher than the $2.5 EPS yahoo estimate and exactly inline with the 167% yoy 5-year trend in growth: EPS 2007 was $1.25 x (1+1.67)=3.3. The estimate appears definitely low. Even $4 EPS is reasonable as long as the exchange rate remains favorable, but the math and business model stability proves 3.3 +/- 0.2. 2009 will see 830 MW at $2.15/Wp giving 7.2 EPS in 2009, way above the $5 EPS estimate. Error is no more than 0.5 with exchange rate stability.
      View article »
    • Sun Apr 20th 12:02 PM | Rating: 0 0
      Commented on:
      First Solar Now in Its Third Leg Up
      Give me some numbers. What's the maximum amount of Te you expect FSLR to be able to obtain for each of the next 5 years? Or what is the demand from LCD for each of the next 5 years.

      I guess the LCD market is the biggest threat to FSLR. I don't think they require more than 0.1 gram per large screen TV, which means FSLR doesn't have a chance in getting their hands on Te if LCD trend continues (50% of world Te production this year and increasing 30%/yr ?).
      View article »
    • Sun Apr 20th 08:50 AM | Rating: 0 0
      Commented on:
      First Solar Now in Its Third Leg Up
      Here's the calculation I'm saying shows FSLR can't have a PE worse than 10 by end of 2012

      PE = mc/(p*W*(1+g/100%)^n)

      mc=market cap ($22B today)
      p=profit/Wp (currently $1/Wp and current contracts do not allow this to decrease for 5 years if cost/Wp goes down as FSLR predicts)
      W = Wp produced in 2008 (0.4GWp from guidance)
      g= yoy growth (160% by 6-year trend, 180% by 2-year trend)
      n=years after 2008

      I
      View article »
    • Sun Apr 20th 06:57 AM | Rating: 0 0
      Commented on:
      First Solar Now in Its Third Leg Up
      PS, no one any any message board has posted any calculations to contradict what I've said above. Te is the only wild card which does not apply until 2012 which I've also shown based on calculation instead of speculation or unsupported claims. If you disagree, change my equations or inputs and explain why the changes are needed and then I'll show where you are wrong.
      View article »
    • Sun Apr 20th 06:52 AM | Rating: 0 0
      Commented on:
      First Solar Now in Its Third Leg Up
      I failed to mention that the reason i was once again going through the calculation is that i didn't understand your calculation. In particular where the 15.385 comes from. Now reviewing it, I understand. But that is not relevant. I'm sure the contracts end in 5 years or less which i thought was even directly mentioned. There is no reason to go below "grid parity" which can occur in 2012 at $1.52/Wp (using $2/Wp in 2008) which is $0.05/kWh including having to make a 5% loan for the upfront costs. Also including in their guidance is that their costs at this time will be $0.60 ($0.92 profit/Wp) and i do not expect that to go lower especially in light of Te. However, installation costs are not in this and to have true grid parity, their revenue for new orders in 2012 will have to be $1.08/Wp ($0.48 profit/Wp) if installation costs $0.44/Wp. Otherwise at the 6.5%/yr reduction the $1.08/Wp grid parity is 2017.

      If last year's contracts did pay a premium for being early adopters and FSLR lowers the price of new orders faster to reach true grid parity in 2012 (probably needed to stimulate demand), their profit will be $0.48/Wp giving a PE=7 at today's market cap, if they reach the $0.60 as claimed and if growth slows from 160% yoy to 100% yoy. PE=1.6 at end of 2011 if growth does not slow and costs are $0.80 and 6.5% reduction is kept in place.

      This not for entertainment or merely an engineer's mental masturbation. Only by going through the calculations can you know when Te will run out and what the profit, revenue, demand, and PE will be. If you believe production cannot keep up or costs will have to come down based on decreased demand, you can change the inputs accordingly. Because of the simplicity surrounding FSLR, these equations apply more than to any other company, including any other solar.
      View article »
Loading...
Symbols:
Authors:
Quick Links:
Contribute an Article Become a Seeking Alpha Contributor

Transcripts

More Transcripts»