vitamin_j's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/160507/comments http://seekingalpha.com/article/129454-five-top-solar-power-stocks?source=feed#comment-452356 452356
Evergreen Solar, for example, is not a thin-film solar company. They have a "string ribbon" technology for working w silicon, but it has nothing to do w thin film deposition, nothing at all.

China is definitely not the world's second biggest market - I don't know where that comes from. Spain was probably number two last year - since the Spanish subsidy change, no one knows who's number two this year. It could be the US. But it's not China. They're just getting started with their market.

Also, anyone who knows anything about installations would mention the role an inverter plays, rather than a "control system." (Why not just say "thingamajig"?)

The conversion efficiencies described are way off too. First Solar's thin film panels regularly convert 10% today. Commercially sold silicon panels today are more like 14-15%. Top lab-tested panels are at least in the high 20s, perhaps even more. These numbers make a difference.

The list goes on...]]> Sun, 05 Apr 2009 11:11:12 -0400
Evergreen Solar, for example, is not a thin-film solar company. They have a "string ribbon" technology for working w silicon, but it has nothing to do w thin film deposition, nothing at all.

China is definitely not the world's second biggest market - I don't know where that comes from. Spain was probably number two last year - since the Spanish subsidy change, no one knows who's number two this year. It could be the US. But it's not China. They're just getting started with their market.

Also, anyone who knows anything about installations would mention the role an inverter plays, rather than a "control system." (Why not just say "thingamajig"?)

The conversion efficiencies described are way off too. First Solar's thin film panels regularly convert 10% today. Commercially sold silicon panels today are more like 14-15%. Top lab-tested panels are at least in the high 20s, perhaps even more. These numbers make a difference.

The list goes on...]]> http://seekingalpha.com/article/114994-solyndra-chief-scientist-markus-beck-defects-to-first-solar?source=feed#comment-356882 356882 Thu, 15 Jan 2009 15:17:54 -0500 http://seekingalpha.com/article/114471-from-long-shots-to-big-shots-small-cap-renewable-energy-stocks?source=feed#comment-354540 354540
How can this statement be true when you have PV efficiencies that range from 6% (thin film) to 22% (best crystalline panels)?

Such low quality info suggests that the poster is very poorly informed, has an unstated agenda, or both.

I would also dicker with the article's contention that "Akeena stock recently took a dip after it announced plans to sell up to $30 million in a mixed shelf securities offering."

Akeena's share price took a dip because of a little thing called the global financial crisis/credit crunch/massive recession. It declined along with the shares of just about everyone else. The shelf filing occurred fairly recently, and prices have actually improved since then. However, I won't try to claim a causal relationship, since trying to correspond all but the most obvious blips and bumps in a share price to events is really a fool's game.]]> Tue, 13 Jan 2009 12:07:59 -0500
How can this statement be true when you have PV efficiencies that range from 6% (thin film) to 22% (best crystalline panels)?

Such low quality info suggests that the poster is very poorly informed, has an unstated agenda, or both.

I would also dicker with the article's contention that "Akeena stock recently took a dip after it announced plans to sell up to $30 million in a mixed shelf securities offering."

Akeena's share price took a dip because of a little thing called the global financial crisis/credit crunch/massive recession. It declined along with the shares of just about everyone else. The shelf filing occurred fairly recently, and prices have actually improved since then. However, I won't try to claim a causal relationship, since trying to correspond all but the most obvious blips and bumps in a share price to events is really a fool's game.]]> http://seekingalpha.com/article/111204-analyst-first-solar-reaches-grid-parity-milestone?source=feed#comment-332346 332346 Wed, 17 Dec 2008 14:57:44 -0500 http://seekingalpha.com/article/110893-three-things-obama-will-do-to-advance-alternative-energy?source=feed#comment-330938 330938
"Companies who have domestic production should benefit, including FSLR, STP SPWR, ENER." - Factual error. STP does not have domestic US production (if that's what the vague phrase "domestic production" meant). They have a US sales office, and now a US based installation venture, but no production. They've talked about building a US factory, but haven't yet bc of the credit crisis.

"Wind energy has been proven cheaper than solar and has achieved grid parity to some extent." - This shows a lack of understanding of what "grid parity" means. In California, Hawaii, Italy, and other markets, the annualized cost (over 20-25 years) of installing solar on a large home and the cost of buying grid power at current rates is equivalent. Tiered rates and peak power make a big difference. In places like Alabama, where electricity retails for 7c/kwh, solar's a long way off.

So to compare wind and solar in terms of an abstract "grid parity" is really not meaningful.]]> Tue, 16 Dec 2008 10:39:45 -0500
"Companies who have domestic production should benefit, including FSLR, STP SPWR, ENER." - Factual error. STP does not have domestic US production (if that's what the vague phrase "domestic production" meant). They have a US sales office, and now a US based installation venture, but no production. They've talked about building a US factory, but haven't yet bc of the credit crisis.

"Wind energy has been proven cheaper than solar and has achieved grid parity to some extent." - This shows a lack of understanding of what "grid parity" means. In California, Hawaii, Italy, and other markets, the annualized cost (over 20-25 years) of installing solar on a large home and the cost of buying grid power at current rates is equivalent. Tiered rates and peak power make a big difference. In places like Alabama, where electricity retails for 7c/kwh, solar's a long way off.

So to compare wind and solar in terms of an abstract "grid parity" is really not meaningful.]]> http://seekingalpha.com/article/110688-with-thin-film-u-s-might-take-the-lead-in-solar-market?source=feed#comment-330082 330082
While I don't consider it an "either/or" proposition, I'm still skeptical about thin film because of its low efficiencies. If, in a rough comparison, you need two thin film panels for every one crystalline silicon panel, that's twice as many mounts, and twice as much space used per installation. Those two factors add to costs and limit thin film's advantage.

I'm interested to see how some of the new non-panel technologies look - Nanosolar claims to offer a skin you can just unroll on a rooftop, for example. They also claim higher efficiencies. Then again, they are famous for claims, not yet famous for results.]]> Mon, 15 Dec 2008 13:08:43 -0500
While I don't consider it an "either/or" proposition, I'm still skeptical about thin film because of its low efficiencies. If, in a rough comparison, you need two thin film panels for every one crystalline silicon panel, that's twice as many mounts, and twice as much space used per installation. Those two factors add to costs and limit thin film's advantage.

I'm interested to see how some of the new non-panel technologies look - Nanosolar claims to offer a skin you can just unroll on a rooftop, for example. They also claim higher efficiencies. Then again, they are famous for claims, not yet famous for results.]]> http://seekingalpha.com/article/109877-suntech-power-now-a-takeover-target?source=feed#comment-324604 324604
Of course, this author doesn't seem very credible. Anyone who says

"As the top two solar companies, Suntech Power (STP) and First Solar (FSLR) dominate the European and U.S. markets respectively."

not only hasn't done their homework, they haven't even cracked the book. First Solar has sold almost exclusively in Europe, almost exclusively in Germany, and is just now moving into the US. Suntech is a similar story, though they also have some Asian sales. I'll take my information from someone who actually follows the companies, listens to cc's, thank you.

Finally, I would question whether anyone could just acquire Suntech without some intervention from the Chinese government. My sense is that they wouldn't just let their flagship solar company be sold off to the Japanese or the Americans without raising some barriers - similar to when the Chinese wanted to buy that oil company of ours. ]]> Tue, 09 Dec 2008 10:20:32 -0500
Of course, this author doesn't seem very credible. Anyone who says

"As the top two solar companies, Suntech Power (STP) and First Solar (FSLR) dominate the European and U.S. markets respectively."

not only hasn't done their homework, they haven't even cracked the book. First Solar has sold almost exclusively in Europe, almost exclusively in Germany, and is just now moving into the US. Suntech is a similar story, though they also have some Asian sales. I'll take my information from someone who actually follows the companies, listens to cc's, thank you.

Finally, I would question whether anyone could just acquire Suntech without some intervention from the Chinese government. My sense is that they wouldn't just let their flagship solar company be sold off to the Japanese or the Americans without raising some barriers - similar to when the Chinese wanted to buy that oil company of ours. ]]> http://seekingalpha.com/article/109889-solar-grid-parity-the-great-1-myth?source=feed#comment-324580 324580 Tue, 09 Dec 2008 10:07:42 -0500 http://seekingalpha.com/article/105385-obama-s-green-obsession-more-harm-than-good?source=feed#comment-303226 303226
Once I got past the windy and in this case unnecessary theoretical discussion (mostly ornamental, dressing up a weak argument in fancy terms), you seem to argue that Obama should not try to jump start an alt energy industry because coal and gas have already reached economies of scale. Basically, we wouldn't want to alter the status quo; after all it's already so well established.

This ignores the fact that some pretty modest government support has already brought solar within sight of becoming an economy of scale, with all the same advantages that supposedly can only exist with coal and gas. And that future support is intended to get them to the point of being self-sufficient economies of scale. That's with today's technology mind - that's not mentioning efficiency or manufacturing improvements, or recent advances like the discovery at MIT of a better catalyzed hydrogen production that could work with solar power. Finally, talking about any form of energy generation as if it exists without massive government incentives and direct or indirect support is just naive. The coal, gas, nuclear, and oil industries are already just as supported by government as your supposed anti-free market green sources would be.

You also seem to think that building alt energy generation, at least in the timeframe Obama discusses, means massively decommissioning coal and gas plants and immediately eliminating those industries. This is just not the case, and nobody serious is saying it will be anything but a very phased process. It just serves your argument that Obama's plan will kill jobs, which is the standard entrenched corporate interest argument against doing anything. You give a hysterical, straw man version of the plan so you can easily knock it down.

Finally, your article has no mention of carbon costs. They probably don't exist to you, but the Pentagon and the CIA are already planning for the security ramifications of global warming, insurers are already adjusting actuarial tables for it, and investment banks are already growing leery of financing coal plant building. Though I would argue that the equation is already in alt energy's favor, it really really becomes in alt energy's favor once you factor in the previously externalized cost of carbon.

Really, I could go on, but I'd like to get a sandwich. Very poor. You should read Neal Dikeman on cleantechblog. He's also a skeptic of the Obama plan, but at least he can write.]]> Tue, 11 Nov 2008 14:34:44 -0500
Once I got past the windy and in this case unnecessary theoretical discussion (mostly ornamental, dressing up a weak argument in fancy terms), you seem to argue that Obama should not try to jump start an alt energy industry because coal and gas have already reached economies of scale. Basically, we wouldn't want to alter the status quo; after all it's already so well established.

This ignores the fact that some pretty modest government support has already brought solar within sight of becoming an economy of scale, with all the same advantages that supposedly can only exist with coal and gas. And that future support is intended to get them to the point of being self-sufficient economies of scale. That's with today's technology mind - that's not mentioning efficiency or manufacturing improvements, or recent advances like the discovery at MIT of a better catalyzed hydrogen production that could work with solar power. Finally, talking about any form of energy generation as if it exists without massive government incentives and direct or indirect support is just naive. The coal, gas, nuclear, and oil industries are already just as supported by government as your supposed anti-free market green sources would be.

You also seem to think that building alt energy generation, at least in the timeframe Obama discusses, means massively decommissioning coal and gas plants and immediately eliminating those industries. This is just not the case, and nobody serious is saying it will be anything but a very phased process. It just serves your argument that Obama's plan will kill jobs, which is the standard entrenched corporate interest argument against doing anything. You give a hysterical, straw man version of the plan so you can easily knock it down.

Finally, your article has no mention of carbon costs. They probably don't exist to you, but the Pentagon and the CIA are already planning for the security ramifications of global warming, insurers are already adjusting actuarial tables for it, and investment banks are already growing leery of financing coal plant building. Though I would argue that the equation is already in alt energy's favor, it really really becomes in alt energy's favor once you factor in the previously externalized cost of carbon.

Really, I could go on, but I'd like to get a sandwich. Very poor. You should read Neal Dikeman on cleantechblog. He's also a skeptic of the Obama plan, but at least he can write.]]> http://seekingalpha.com/article/103878-four-reasons-to-expect-a-solar-boom?source=feed#comment-298096 298096
"Companies like First Solar and Suntech Power are self-funded companies that have been making money all the time, and these two companies have sufficient funds to expand their businesses."

is not true. Suntech has been partially funding its Capex through debt issues, most recently this past March. First Solar does indeed fund its expansion entirely through free cash flow. This makes it almost singular among solars. Suntech is one of the best of the silicon-based companies, and unlike most goes in and out of positive free cash flow. Also unlike most other Chinese solars, it is sitting on quite a money pile at the moment, which should give investors greater confidence for near-term headwinds. However, to imply that it funds itself solely through retained earnings like First Solar is misleading.]]> Tue, 04 Nov 2008 11:52:46 -0500
"Companies like First Solar and Suntech Power are self-funded companies that have been making money all the time, and these two companies have sufficient funds to expand their businesses."

is not true. Suntech has been partially funding its Capex through debt issues, most recently this past March. First Solar does indeed fund its expansion entirely through free cash flow. This makes it almost singular among solars. Suntech is one of the best of the silicon-based companies, and unlike most goes in and out of positive free cash flow. Also unlike most other Chinese solars, it is sitting on quite a money pile at the moment, which should give investors greater confidence for near-term headwinds. However, to imply that it funds itself solely through retained earnings like First Solar is misleading.]]> http://seekingalpha.com/article/101110-evergreen-solar-why-this-overlooked-company-is-a-good-investment?source=feed#comment-287867 287867
I would say that "Evergreen is a partner IN EverQ" would probably be the most accurate statement. I would say that it's germane to this discussion because Evergreen shares in EverQ losses as well as providing it financing. Perhaps this is what Honeycutt is trying to tell me.

Under German law:

German Regulatory Authorities Approve EverQ Partnership Agreements
21/12/2006 - 22:04

Evergreen Solar, Inc. (Nasdaq: ESLR), Q-Cells AG (FSE: QCE) and Renewable Energy Corporation ASA (OSEAX: REC.OL) (REC) today announced that regulatory authorities in Germany have approved previously announced partnership agreements that make the companies equal partners in EverQ, which manufactures solar modules in Thalheim, Germany. Effective December 19, 2006, all three partners will share equally in the net income generated by EverQ.

From the June 28 10-Q:

The Company is currently a one-third owner of EverQ GmbH (“EverQ”), a joint venture with Q-Cells AG (“Q-Cells”) and Renewable Energy Corporation ASA (“REC”), and licenses to EverQ its wafer manufacturing technology used to manufacture solar panels. The Company accounts for its ownership interest in EverQ using the equity method of accounting in accordance with APB 18 “Equity Method of Accounting for Investments in Common Stock.” Under the equity method of accounting, the Company reports its one-third share of EverQ’s net income or loss as a single line item in its condensed consolidated income statement and its investment in EverQ as a single line item in its condensed consolidated balance sheet.

EverQ Debt Guarantee
On April 30, 2007, the Company, Q-Cells and REC entered into a Guarantee and Undertaking Agreement in connection with EverQ entering into a loan agreement with a syndicate of lenders led by Deutsche Bank AG (the “Guarantee”). The loan agreement provides EverQ with aggregate borrowing availability of up to 142.0 million Euros. Pursuant to the Guarantee, the Company, Q-Cells and REC each agreed to guarantee a one-third portion of the loan outstanding, up to 30.0 million Euros of EverQ’s repayment obligations under the loan agreement. ]]> Wed, 22 Oct 2008 12:15:24 -0400
I would say that "Evergreen is a partner IN EverQ" would probably be the most accurate statement. I would say that it's germane to this discussion because Evergreen shares in EverQ losses as well as providing it financing. Perhaps this is what Honeycutt is trying to tell me.

Under German law:

German Regulatory Authorities Approve EverQ Partnership Agreements
21/12/2006 - 22:04

Evergreen Solar, Inc. (Nasdaq: ESLR), Q-Cells AG (FSE: QCE) and Renewable Energy Corporation ASA (OSEAX: REC.OL) (REC) today announced that regulatory authorities in Germany have approved previously announced partnership agreements that make the companies equal partners in EverQ, which manufactures solar modules in Thalheim, Germany. Effective December 19, 2006, all three partners will share equally in the net income generated by EverQ.

From the June 28 10-Q:

The Company is currently a one-third owner of EverQ GmbH (“EverQ”), a joint venture with Q-Cells AG (“Q-Cells”) and Renewable Energy Corporation ASA (“REC”), and licenses to EverQ its wafer manufacturing technology used to manufacture solar panels. The Company accounts for its ownership interest in EverQ using the equity method of accounting in accordance with APB 18 “Equity Method of Accounting for Investments in Common Stock.” Under the equity method of accounting, the Company reports its one-third share of EverQ’s net income or loss as a single line item in its condensed consolidated income statement and its investment in EverQ as a single line item in its condensed consolidated balance sheet.

EverQ Debt Guarantee
On April 30, 2007, the Company, Q-Cells and REC entered into a Guarantee and Undertaking Agreement in connection with EverQ entering into a loan agreement with a syndicate of lenders led by Deutsche Bank AG (the “Guarantee”). The loan agreement provides EverQ with aggregate borrowing availability of up to 142.0 million Euros. Pursuant to the Guarantee, the Company, Q-Cells and REC each agreed to guarantee a one-third portion of the loan outstanding, up to 30.0 million Euros of EverQ’s repayment obligations under the loan agreement. ]]> http://seekingalpha.com/article/101110-evergreen-solar-why-this-overlooked-company-is-a-good-investment?source=feed#comment-287752 287752 -EverQ is a legal, not a figurative partnership. You don't get licensing revenue from a figurative partnership. EverQ is a joint venture between Evergreen, Q-Cells, and the Norwegian company REC. There's talk of making EverQ a separate company (could be a good IPO), but it hasn't happened yet.
- You don't mention Evergreen's involvement in Lehman's collapse. Lehman had borrowed 30 million ESLR shares as part of a hedging agreement. When Lehman went BK, suddenly it became possible that these shares might be sold off, not recovered by ESLR, and dilute the price. That's why the price lost 2-3 dollars recently. Lawsuit's in progress.
- You should take a closer look at world silicon supply. The more silicon supply comes on line, the cheaper regular panels get, the closer to a commodity they become, and the less compelling the ESLR technology becomes. ]]> Wed, 22 Oct 2008 10:37:20 -0400 -EverQ is a legal, not a figurative partnership. You don't get licensing revenue from a figurative partnership. EverQ is a joint venture between Evergreen, Q-Cells, and the Norwegian company REC. There's talk of making EverQ a separate company (could be a good IPO), but it hasn't happened yet.
- You don't mention Evergreen's involvement in Lehman's collapse. Lehman had borrowed 30 million ESLR shares as part of a hedging agreement. When Lehman went BK, suddenly it became possible that these shares might be sold off, not recovered by ESLR, and dilute the price. That's why the price lost 2-3 dollars recently. Lawsuit's in progress.
- You should take a closer look at world silicon supply. The more silicon supply comes on line, the cheaper regular panels get, the closer to a commodity they become, and the less compelling the ESLR technology becomes. ]]> http://seekingalpha.com/article/100445-solar-stocks-are-now-attractive-again?source=feed#comment-284653 284653
A stock screener can tell me who has a low forward P/E and other various pretty numbers. If I'm going to decide on a company's value, I better understand their business and what variables will affect it in the future. This writer doesn't help much there.]]> Fri, 17 Oct 2008 12:57:20 -0400
A stock screener can tell me who has a low forward P/E and other various pretty numbers. If I'm going to decide on a company's value, I better understand their business and what variables will affect it in the future. This writer doesn't help much there.]]> http://seekingalpha.com/article/94376-dikeman-skeptical-of-game-changing-new-energy-technologies?source=feed#comment-248220 248220 Mon, 08 Sep 2008 09:58:44 -0400 http://seekingalpha.com/article/92708-solar-generation-costs-on-track-to-achieve-grid-parity?source=feed#comment-239308 239308 Tue, 26 Aug 2008 11:38:42 -0400 http://seekingalpha.com/article/92287-need-cash-see-suntech?source=feed#comment-238494 238494
I am surprised that you are investing in Suntech yet seem blind to their strategy and to the demands of the silicon PV supply chain. Are you just reading those bearish (now bullish again) Motley Fool articles and wondering why you bought STP again?

I also wonder if we heard the same CC. Analysts did indeed ask very detailed questions about the investments you mention - how each was doing in production, etc., what some of the details of the investments were in numbers and terms - and the terms of silicon supply prepayments (going down significantly over the year, I'd note).

Whether or not these are "good investments" I suppose depends on your view of the silicon market and business, and of these particular suppliers. Have you looked into Nitol as a company? Glory Silicon? Hoku? Asia Silicon? I have (somewhat), and my impression is that Suntech is buying stakes in the best of the new wave of silicon refiners because it can afford to. These refiners are run by serious experts who are likely to successfully manage the difficult technicalities of silicon production.

I would also say that, while its margins will come down, silicon refining for the PV industry will be a growth business for years to come. So, in buying equity stakes in these companies, Suntech has wisely bought into its own growth along with the growth of the industry. It did this while avoiding having to itself become a refiner - build its own plant, etc.

The result of these recent investments, combined with existing long-term supply deals, is that Suntech will see 20% lower silicon costs in 2009, and costs will continue to decline thereafter. Given that silicon is 70% of a panel's cost, that means that total panel cost will be down roughly 14% in '09. With ASPs holding steady so far or declining in low single digits, that means a fatter gross margin for Suntech, which has secured 900 MW of silicon for its 1000 MW 2009 capacity. They will (along with every other module maker) continue to have significant capex, but these improved margins can only get them closer to being cash flow positive (which they were in 07, I believe). Other silicon PV solar companies cannot say the same for their silicon costs (see Trina), margin outlook, or the resulting ability to organically grow operations.

So my opinion is that Suntech is strongly positioned to succeed in the today's silicon PV business. They also have an admirable long-term orientation. They consistently talk about grid parity - that's when China and India will get in the solar game in a major way - and how they're going to get there. Other risks - a miraculous breakthrough by Nanosolar, a huge (contrary to projections and high demand) decline in the silicon per/kg spot market, drastic subsidy changes - could derail their strategy or put silicon PV out of favor. That's the speculative aspect of solar investing. But for today's money and today's knowledge, I think Suntech is one of the premier solar companies operating today.

Disc: long Suntech. ]]> Mon, 25 Aug 2008 11:26:37 -0400
I am surprised that you are investing in Suntech yet seem blind to their strategy and to the demands of the silicon PV supply chain. Are you just reading those bearish (now bullish again) Motley Fool articles and wondering why you bought STP again?

I also wonder if we heard the same CC. Analysts did indeed ask very detailed questions about the investments you mention - how each was doing in production, etc., what some of the details of the investments were in numbers and terms - and the terms of silicon supply prepayments (going down significantly over the year, I'd note).

Whether or not these are "good investments" I suppose depends on your view of the silicon market and business, and of these particular suppliers. Have you looked into Nitol as a company? Glory Silicon? Hoku? Asia Silicon? I have (somewhat), and my impression is that Suntech is buying stakes in the best of the new wave of silicon refiners because it can afford to. These refiners are run by serious experts who are likely to successfully manage the difficult technicalities of silicon production.

I would also say that, while its margins will come down, silicon refining for the PV industry will be a growth business for years to come. So, in buying equity stakes in these companies, Suntech has wisely bought into its own growth along with the growth of the industry. It did this while avoiding having to itself become a refiner - build its own plant, etc.

The result of these recent investments, combined with existing long-term supply deals, is that Suntech will see 20% lower silicon costs in 2009, and costs will continue to decline thereafter. Given that silicon is 70% of a panel's cost, that means that total panel cost will be down roughly 14% in '09. With ASPs holding steady so far or declining in low single digits, that means a fatter gross margin for Suntech, which has secured 900 MW of silicon for its 1000 MW 2009 capacity. They will (along with every other module maker) continue to have significant capex, but these improved margins can only get them closer to being cash flow positive (which they were in 07, I believe). Other silicon PV solar companies cannot say the same for their silicon costs (see Trina), margin outlook, or the resulting ability to organically grow operations.

So my opinion is that Suntech is strongly positioned to succeed in the today's silicon PV business. They also have an admirable long-term orientation. They consistently talk about grid parity - that's when China and India will get in the solar game in a major way - and how they're going to get there. Other risks - a miraculous breakthrough by Nanosolar, a huge (contrary to projections and high demand) decline in the silicon per/kg spot market, drastic subsidy changes - could derail their strategy or put silicon PV out of favor. That's the speculative aspect of solar investing. But for today's money and today's knowledge, I think Suntech is one of the premier solar companies operating today.

Disc: long Suntech. ]]> http://seekingalpha.com/article/92133-solar-cycles-and-stocks-the-sun-also-rises?source=feed#comment-236635 236635
However, can we come to some kind of consensus about article names? Can we permanently ban all cheesy sun referencing titles for solar articles such as "The Sun Also Rises," "Here Comes the Sun," etc.? I think diversifying our metaphors will help the industry expand further into the mainstream.]]> Fri, 22 Aug 2008 13:06:15 -0400
However, can we come to some kind of consensus about article names? Can we permanently ban all cheesy sun referencing titles for solar articles such as "The Sun Also Rises," "Here Comes the Sun," etc.? I think diversifying our metaphors will help the industry expand further into the mainstream.]]> http://seekingalpha.com/article/91198-everything-they-tell-you-about-solar-is-wrong-travis-bradford?source=feed#comment-231476 231476
I'd say the stuff about grid parity and how to consider solar cost is not fluff. Though the overall tone of the piece swerves between the informative and the out and out promotional. ]]> Fri, 15 Aug 2008 16:00:06 -0400
I'd say the stuff about grid parity and how to consider solar cost is not fluff. Though the overall tone of the piece swerves between the informative and the out and out promotional. ]]> http://seekingalpha.com/article/91147-game-changer-in-solar-energy-pg-e-inks-deal?source=feed#comment-231268 231268
I hate to bring Cramer into this - he is an obnoxious and damaging noisemaker. However, it is true that residential installation is a tough tough business. As an Akeena shareholder (please, castigate me), I watch any potential profits they make devoured by the ballooning costs of selling and marketing. Where one customer, a utility, buys enough capacity to power 240,000 homes, if you're going by the residential model, you'd have to make 240,000 separate sales to accomplish the same thing. That's partially a simplification, but it does make me wonder.]]> Fri, 15 Aug 2008 12:20:45 -0400
I hate to bring Cramer into this - he is an obnoxious and damaging noisemaker. However, it is true that residential installation is a tough tough business. As an Akeena shareholder (please, castigate me), I watch any potential profits they make devoured by the ballooning costs of selling and marketing. Where one customer, a utility, buys enough capacity to power 240,000 homes, if you're going by the residential model, you'd have to make 240,000 separate sales to accomplish the same thing. That's partially a simplification, but it does make me wonder.]]> http://seekingalpha.com/article/85058-chinese-solar-stocks-present-compelling-value?source=feed#comment-206936 206936
However, one thing about his "undervalued" argument (and I think Jack Yetiv's as well) is the question of when exactly the market is supposed to correctly value TSL et al. Investors in this bear market tend to overvalue bad news (share dilution, cash flow concerns, growing pains, margin compression), while undervaluing good news (example: a nice bump, sure, on today's TSL announcement, but not the 15% - 20% spike from last year's solar boom).

So there's some risk that these companies might continue with booming earning announcements, solar fundamentals keep looking great, the story is there, but that investors (especially large institutions worried about risk, credit, leverage, etc.) might steer clear of growth stocks in a highly speculative industry in an emerging market (China) as a rule. That might keep these companies undervalued until the broader market gets its legs back, I believe.

That's not to say that the thesis is void - Trina could very well be that great company ignored by the market - just that it may be years not months for it to pay. And that gets into the territory where Jack Yetiv fears to tread (right, Jack?): past the one-year horizon where industry-wide changes in technology might really shake up the game. So, if you're confident that TSL will survive and thrive for years to come, now is probably a great time to get some discounted shares. I'm more skeptical about investing for months vs. years. That might just go sideways or down further.

Also, my more skeptical case could be mitigated some by better news on subsidies and new solar markets. I personally believe that "green recovery/stimulus" is in the air here in America, but won't begin to be seriously enacted by the US government until the middle of next year.

With a one-year-plus horizon, I am long Suntech (STP) and Akeena Solar (AKNS).]]> Wed, 16 Jul 2008 11:59:01 -0400
However, one thing about his "undervalued" argument (and I think Jack Yetiv's as well) is the question of when exactly the market is supposed to correctly value TSL et al. Investors in this bear market tend to overvalue bad news (share dilution, cash flow concerns, growing pains, margin compression), while undervaluing good news (example: a nice bump, sure, on today's TSL announcement, but not the 15% - 20% spike from last year's solar boom).

So there's some risk that these companies might continue with booming earning announcements, solar fundamentals keep looking great, the story is there, but that investors (especially large institutions worried about risk, credit, leverage, etc.) might steer clear of growth stocks in a highly speculative industry in an emerging market (China) as a rule. That might keep these companies undervalued until the broader market gets its legs back, I believe.

That's not to say that the thesis is void - Trina could very well be that great company ignored by the market - just that it may be years not months for it to pay. And that gets into the territory where Jack Yetiv fears to tread (right, Jack?): past the one-year horizon where industry-wide changes in technology might really shake up the game. So, if you're confident that TSL will survive and thrive for years to come, now is probably a great time to get some discounted shares. I'm more skeptical about investing for months vs. years. That might just go sideways or down further.

Also, my more skeptical case could be mitigated some by better news on subsidies and new solar markets. I personally believe that "green recovery/stimulus" is in the air here in America, but won't begin to be seriously enacted by the US government until the middle of next year.

With a one-year-plus horizon, I am long Suntech (STP) and Akeena Solar (AKNS).]]> http://seekingalpha.com/article/85058-chinese-solar-stocks-present-compelling-value?source=feed#comment-206327 206327
My main point wasn't to bash Trina, but to call out what I felt was a fatuous comparison with MEMC in the article. ]]> Tue, 15 Jul 2008 16:11:44 -0400
My main point wasn't to bash Trina, but to call out what I felt was a fatuous comparison with MEMC in the article. ]]> http://seekingalpha.com/article/85058-chinese-solar-stocks-present-compelling-value?source=feed#comment-206116 206116
Plus, WFR isn't even a pure-play solar company. Much of their revenue comes from supplying other, more traditional semi-conductor needs.

Investors be warned; comparing these two companies as the author does is just wrong.]]> Tue, 15 Jul 2008 12:29:22 -0400
Plus, WFR isn't even a pure-play solar company. Much of their revenue comes from supplying other, more traditional semi-conductor needs.

Investors be warned; comparing these two companies as the author does is just wrong.]]> http://seekingalpha.com/article/84830-canadian-solar-the-next-solar-takeover-target?source=feed#comment-205481 205481
SPWR's business is based around the idea of producing and selling a premium high-efficiency panel, which offers the benefit of cutting "balance of system" costs (higher efficiency means less panels per system, means less wiring, racking, labor, etc. to install). That focus on "balance of system" explains why SPWR acquired Powerlight and participates in the installation/integrati... business - it's where they will best compete in the solar value chain as their business progresses.

Why then would they want to get a producer that makes panels that are OK, industry standard, but aren't any more efficient than the norm? So they can buy the company, then retrofit all the production lines? Or increase the number of panels per installation? What does UMG get them - beyond panels that are less efficient than the norm? Such an acquisition would just weaken Sunpower's strategy, so I don't see it as likely.

With Suntech, it's a little more of a natural fit. However, I'd question why they wouldn't just take the billion plus they'd spend on CSIQ and put it towards their own capacity expansion? The extra capacity would be the only thing of value STP would gain, plus there would be the money, time, and risks involved in bringing together two different manufacturing organizations, QC methods, etc. It's easy as an investor to treat these things as afterthoughts, but they're the "devils in the details" for M&A.

Finally, I'd mention that Suntech CEO Dr. Shi was pretty dismissive of UMG technology during the Q&A at the recent InterSolar show. So neither company seems likely to acquire CSIQ, in my opinion.]]> Mon, 14 Jul 2008 17:23:01 -0400
SPWR's business is based around the idea of producing and selling a premium high-efficiency panel, which offers the benefit of cutting "balance of system" costs (higher efficiency means less panels per system, means less wiring, racking, labor, etc. to install). That focus on "balance of system" explains why SPWR acquired Powerlight and participates in the installation/integrati... business - it's where they will best compete in the solar value chain as their business progresses.

Why then would they want to get a producer that makes panels that are OK, industry standard, but aren't any more efficient than the norm? So they can buy the company, then retrofit all the production lines? Or increase the number of panels per installation? What does UMG get them - beyond panels that are less efficient than the norm? Such an acquisition would just weaken Sunpower's strategy, so I don't see it as likely.

With Suntech, it's a little more of a natural fit. However, I'd question why they wouldn't just take the billion plus they'd spend on CSIQ and put it towards their own capacity expansion? The extra capacity would be the only thing of value STP would gain, plus there would be the money, time, and risks involved in bringing together two different manufacturing organizations, QC methods, etc. It's easy as an investor to treat these things as afterthoughts, but they're the "devils in the details" for M&A.

Finally, I'd mention that Suntech CEO Dr. Shi was pretty dismissive of UMG technology during the Q&A at the recent InterSolar show. So neither company seems likely to acquire CSIQ, in my opinion.]]> http://seekingalpha.com/article/84404-temporary-market-bottom-3-solar-stocks-that-look-like-bargains?source=feed#comment-202329 202329
However, I would note that, when Trina canceled plans to build their own poly plant, investors and analysts applauded this move. If you believe as I do in the thesis that poly prices will be significantly declining due to major new suppliers coming online, why would owning your own poly plant and vertically integrating be such a good thing, as opposed to choosing among suppliers clamoring to give you the best price on a product? And if you do believe that poly will continue to fetch a good price, why not invest in MEMC or the Norwegian REC solar, which both use a more profitable FBR technology, as opposed to a new entrant like LDK (again, I know little of LDK, so it's an honest question)?

Finally, what is your outlook for poly price and what's the evidence for it, as this is a key question for all three companies for the next 1 - 3 years?

Disc: I am long Suntech and Akeena Solar.]]> Thu, 10 Jul 2008 12:34:08 -0400
However, I would note that, when Trina canceled plans to build their own poly plant, investors and analysts applauded this move. If you believe as I do in the thesis that poly prices will be significantly declining due to major new suppliers coming online, why would owning your own poly plant and vertically integrating be such a good thing, as opposed to choosing among suppliers clamoring to give you the best price on a product? And if you do believe that poly will continue to fetch a good price, why not invest in MEMC or the Norwegian REC solar, which both use a more profitable FBR technology, as opposed to a new entrant like LDK (again, I know little of LDK, so it's an honest question)?

Finally, what is your outlook for poly price and what's the evidence for it, as this is a key question for all three companies for the next 1 - 3 years?

Disc: I am long Suntech and Akeena Solar.]]> http://seekingalpha.com/article/84404-temporary-market-bottom-3-solar-stocks-that-look-like-bargains?source=feed#comment-202159 202159
Then I think the author glosses over something significant in considering three Chinese companies but not talking about the dynamics of the Chinese equity market.

Finally, what is this "polysilicone"? Are these companies doing a side business in breast implants?]]> Thu, 10 Jul 2008 10:03:36 -0400
Then I think the author glosses over something significant in considering three Chinese companies but not talking about the dynamics of the Chinese equity market.

Finally, what is this "polysilicone"? Are these companies doing a side business in breast implants?]]> http://seekingalpha.com/article/83940-a-look-at-four-polysilicon-based-pv-manufacturers-funding?source=feed#comment-200755 200755
I also agree with other comments that Envoy's analysis doesn't seem to consider these as high-growth companies in a high-growth industry - these companies will need to spend lots on cap-ex, of course, but most solar investors are aware of how much silicon costs right now and take that into account.

Also, I'm still skeptical of Envoy's apparent view that silicon costs will stay high. I'd especially like to hear a reaction to the reports by several companies that long-term contract prepayments - the financial albatross that will supposedly sink these companies, in Envoy's view - have gone from 10 - 12% of the contract to 3-5% of the contract in the past year. This would indicate a trend, right? Envoy doesn't seem to think so. In my view, he is wrongfully taking a snapshot of today's environment and projecting it too far into the future. I think instead it is safe to assume declining silicon prices from 2008 on - one could argue about how fast prices will fall, but fall they will, based on the reporting of long-term contracts mentioned above.]]> Tue, 08 Jul 2008 13:18:37 -0400
I also agree with other comments that Envoy's analysis doesn't seem to consider these as high-growth companies in a high-growth industry - these companies will need to spend lots on cap-ex, of course, but most solar investors are aware of how much silicon costs right now and take that into account.

Also, I'm still skeptical of Envoy's apparent view that silicon costs will stay high. I'd especially like to hear a reaction to the reports by several companies that long-term contract prepayments - the financial albatross that will supposedly sink these companies, in Envoy's view - have gone from 10 - 12% of the contract to 3-5% of the contract in the past year. This would indicate a trend, right? Envoy doesn't seem to think so. In my view, he is wrongfully taking a snapshot of today's environment and projecting it too far into the future. I think instead it is safe to assume declining silicon prices from 2008 on - one could argue about how fast prices will fall, but fall they will, based on the reporting of long-term contracts mentioned above.]]> http://seekingalpha.com/article/83769-polysilicon-based-pv-manufacturers-clarifying-the-financial-issues?source=feed#comment-198786 198786
Perhaps you might also elaborate on which companies you think will win, if in fact some are destined for the scrap heap via a panel price war, and why. Finally, if your top secret numbers are so great, make a few million and live in style off them, but don't blog the sky is falling and then not back it up with any meat.]]> Sat, 05 Jul 2008 00:06:42 -0400
Perhaps you might also elaborate on which companies you think will win, if in fact some are destined for the scrap heap via a panel price war, and why. Finally, if your top secret numbers are so great, make a few million and live in style off them, but don't blog the sky is falling and then not back it up with any meat.]]> http://seekingalpha.com/article/83769-polysilicon-based-pv-manufacturers-clarifying-the-financial-issues?source=feed#comment-198676 198676
If you believe long-term, diversified silicon sourcing (they call it "virtual integration" compared to vertical integration) is the way to go, I would think Suntech would be your silicon PV company of choice. They were cash-flow positive before they did their convertible offering in March - a move that solars like Trina and CSIQ are just now making - and have locked up plenty of supply since then. This would give them a major advantage over those players that still need to sign deals to secure a part of their '09 product. Suntech has done this and they still have plenty of money in the bank.

Possible downsides include the fact that refining silicon is very complicated. If MEMC can have a plant shutdown, then any of the newer startups are almost bound to have this occur. Also, I could envision a scenario - though it seems unlikely - where silicon prices decline so much that Suntech finds itself locked into higher rates than it could find on the spot market. Again, such a scenario seems remote. ]]> Fri, 04 Jul 2008 16:16:04 -0400
If you believe long-term, diversified silicon sourcing (they call it "virtual integration" compared to vertical integration) is the way to go, I would think Suntech would be your silicon PV company of choice. They were cash-flow positive before they did their convertible offering in March - a move that solars like Trina and CSIQ are just now making - and have locked up plenty of supply since then. This would give them a major advantage over those players that still need to sign deals to secure a part of their '09 product. Suntech has done this and they still have plenty of money in the bank.

Possible downsides include the fact that refining silicon is very complicated. If MEMC can have a plant shutdown, then any of the newer startups are almost bound to have this occur. Also, I could envision a scenario - though it seems unlikely - where silicon prices decline so much that Suntech finds itself locked into higher rates than it could find on the spot market. Again, such a scenario seems remote. ]]> http://seekingalpha.com/article/81879-a-missed-opportunity-in-canadian-solar?source=feed#comment-189282 189282 Fri, 20 Jun 2008 13:19:01 -0400 http://seekingalpha.com/article/81879-a-missed-opportunity-in-canadian-solar?source=feed#comment-189087 189087
On the plus side, they have the capital and lack of debt to get them through the year at their current "burn rate" (which will hopefully decline since they're focusing more on cost discipline); their proprietary panel design is successful and should boost their margins; they're moving into new markets (Hawaii and Colorado); and their prospects are very good once Congress gets it together re renewable energy tax credits. They also stand to benefit as panel prices start to decline in 09. They are one of the major installation players in a field that also includes the private companies SolarCity, REC, and Borrego, as well as the recently public Real Goods Solar. ]]> Fri, 20 Jun 2008 10:28:39 -0400
On the plus side, they have the capital and lack of debt to get them through the year at their current "burn rate" (which will hopefully decline since they're focusing more on cost discipline); their proprietary panel design is successful and should boost their margins; they're moving into new markets (Hawaii and Colorado); and their prospects are very good once Congress gets it together re renewable energy tax credits. They also stand to benefit as panel prices start to decline in 09. They are one of the major installation players in a field that also includes the private companies SolarCity, REC, and Borrego, as well as the recently public Real Goods Solar. ]]>