vitamin_j

From Long Shots to Big Shots: Small Cap Renewable Energy Stocks

"Photovoltaic methods capture 5 to 6 watts per square meter."

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.

Solar Cycles and Stocks: The Sun Also Rises

Good article about the market - enjoyed reading it. Also nice to know that someone out there doesn't see Akeena as doomed.

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.

Semiconductors: Is the Glass Half-Empty or Half-Full?

I'm bullish on solar but don't know where you get the idea that solar subsidies are likely to pass this year. Bush has indicated that he will veto the bill currently under consideration (it raises taxes on hard working money managers' offshore income streams), and I really doubt that the Senate will have the override votes needed.

I think we in the US market (especially those of us who hold Akeena) are in for a tough rest of the year, with prospects improving in '09.

If you know something I don't about the legislation, do share.

Akeena Solar: A 2008 M&A Target?

I'd say Suntech is the most likely candidate for acquiring Akeena. They just raised a nice chunk of cash - on top of the nice chunk they already have. Their leadership thinks long term, and is no doubt trying to devise how best to position themselves in the American market before it really opens up. They recently opened an American office in San Fran, so you've got geographic convenience there (existing Akeena offices offer a ready made expansion into the US market, along with a workforce with useful expertise). They already have a very strong relationship with Akeena - they're manufacturing the Andalay panel (or 90% of the panels now, with Kyocera doing 10%), and are distributing the panels overseas (the sales expertise will be there by end of year - that's an investment in itself).

However, Suntech is definitely hedging their bets within a certain range of solar technologies, doing thin film, BIPV, Andalay, and more, as well as purchasing significant minority stakes in various polysilicon refiners (Hoku Sci, Nitol). So this year I'd suggest they might be more inclined to get a large minority stake in Akeena, rather than buy the company outright.

Is Solar Power Inherently Deflationary?

Supershort - I wouldn't read too much about the viability of solar energy into the overvaluation of one company, SPWR (which, while not the best investment right now, is still an excellent, growing company).

I also don't know where you get this "they say the costs of the systems are increasing." Who is this "they," and to what systems to they refer? Sunpower has laid out a plan to cut installed system costs in half by 2012. Suntech is going to do them one better. While a silicon shortage has kept panel prices high, silicon production will more than triple over the next two years, more panel makers are getting in the game, so panel prices have nowhere to go but down. Competition is going to become fierce and bloody, in fact. And that's just for traditional silicon based PV panels - Nanosolar is selling 3rd Gen CIGS panels that generate at the price of coal - their main question is, can they scale?

Meanwhile, Akeena has designed an EZ install panel that cuts other system costs like labor and racking.

And that ten-year payoff you describe for a system (I assume your "investment" refers to a solar system, not a solar stock)? It's well worth it for a system that is guaranteed for 25 years by panel companies (and may last even longer, given past panel performance). It also assumes that electricity rates in a place like California remain flat going forward vs going up more - not too likely, right?

Yes, I have skin in the game (long Suntech and Akeena). Yes, I believe in solar from an ecological perspective. Yes, it's not going to be a fix-everything energy solution for the next five years (more nuclear could be needed too) - still a lot of growing for the industry to do. And yes, it may change a lot from its current form. Or perhaps not change, but diversify into a wider package of solutions.

However, I think that you really can't dismiss solar at this point. The subsidies needed to get the industry to grid parity (in the 2012 to 2015 realm) are nothing compared to the money our government already gives oil companies, not to mention the billions in defense spending for maintaining security in our Middle Eastern and now African filling stations. I think, long term, it's also the best single energy solution running - think of it as the real, original nuclear power, fusion energy at last. The sun is a giant reactor; all we have to do is find the best way(s) to plug in.

Solar Technology: Cutting Costs the Unsexy Way

Thanks for the response. I am definitely watching those SGA expenses - I don't see how they can improve much in Q4, however I think they will improve over the year. Taking the Q3 call at face value, about a million of their loss (working from memory, not reference) resulted from their mispricing - they expected panel prices to drop over the year, and panel prices did not. Forgive my inexperience, but is that an ERP problem, or just an unfortunate economic call on their part? They also had problems with sales commissions and with installers working overtime - essentially, too much business, too few installers = lots of overtime. Also stock compensation for their departing CFO, among others. Growing the business in that state is a recipe for growing losses, I agree, but I tend to attribute it to growing pains, a temporary state, etc. I believe more "steady state" quarters are on the way that will show better results.

I will take a look at those inventory figures - that's very interesting, and a question I hadn't considered enough, or perhaps not in the right way. I'd also note that they are clearing inventory to make way for their new panels, so I expect that to also weigh on Q4.

I hold some AKNS, so I tend to believe that they made good investments for growing the company long term - they opened a lot of offices in '07. They say each office takes 6-12 months to really get up and running, so I anticipate that those 6 or so offices will stop dragging and start showing more results. I also think that they've got a marketing/sales operation that's sized for the larger company they anticipate being, say by the end of this year. It's an aggressive approach, for sure, but I knew I was buying aggressive when I bought this one.

I also tend to buy into their story about the Andalay panel - it will reduce costs, time, and bring licensing money that will bolster the bottom line. I do however wonder if it's the competitive advantage they claim - after all, REC Solar has come out with a "Solarak" system that also reduces installation costs - so once everyone has an efficient system, then where is Akeena? But I don't know any more about that REC system than what the PR says right now. Maybe Andalay is still the best design out there. At the least it will help Akeena get installation costs down.

Also - is Andalay the "vaporware" you're talking about? I'm about as far from the Valley as you can be, so maybe the term is lost on me. But Andalay exists and is going into the OS, so to speak. Or do you mean the "patent pending" aspect of it? Or some larger metaphorical usage of "vaporware"?

Finally, longer term, I think Akeena will do best if they focus more on being a design company, and not stake their business solely on the "hardware / construction" aspect you mention. That's the way they're trending with Andalay, and they need to keep that up if they're going to make it longterm (or get bought by someone with that view). For example, before someone installs a system on their house, have a thorough energy audit, do everything possible to boost efficiency, so you install the Kws you reasonably need (maybe that's already industry practice). Or with coming things like plug-in hybrids - they need to (maybe they are) get an integrated/plug n play/andalay style carport charging station. Partner with General Motors on it. Basically, diversify, partner, license - think there's a lot with efficiency, monitoring, allocating (a non-technician talking here), financing, carbon-auditing, consulting, and more that would go hand-in-hand with small, distributed PV systems - and that could help buffer them against the ups and downs of the installation business.

Thanks again for your previous response.

Solar Technology: Cutting Costs the Unsexy Way

Mr. Whitehill, I found your comment very interesting.

I'm wondering: are you implying that Akeena is, in your opinion, a "top heavy" company? If so, could you elaborate on why you believe this? Is it specific to their "inventory problem," or general to the company as a whole (sales, marketing operation, etc.)? Thank you very much for your insights.

-A small-time Akeena investor