Solar Guru

Beer, Batteries, and a Solar Power Game Changer

Have you studied another company by Deeya Energy ? It is new form of flow battery which reduces the cost of roundtripping energy even further. This is a Freemont based US company based on Ferrous Oxide as the electrolyte. The final winner probably is the solution which reduces the cost of storage and delivery of power ( round tripping!) and that is where flow batteries will score better.

Solar Guru

The Year in Solar: Strikes Mixed with Gutters

Most of the above analysis and commentory seems to be very factual and well documented but conclusions are probably a bit one sided. The main difference in conclusion whether it is mixed in gutters or a harbinger of growth is out there for the jury to decide. I personally think what we saw in last 24 months was a distorted picture of growth artificially propped by Govt incentives driving demand. What we are likely to see now is a real demand based on cost economics and without the expensive govt subsidy. With the poly silicon prices coming down to 50 dollar level a one could see the early sign of a massive consumer led demand based on pure cost economics without having to depend on govt subsidy . And this demand would be a sustainable one as the solar industry matures and able to afford the cost economics to support the margins to sustain this growth. Once this critical inflexion point is reached( at 50 dollar poly this is now within quarters of being able to achieve) one could expect to see a surge in demand for solar panely.
Of course the only risk one can see with this growth is the impact of low priced crystalline silicon panels would have on the thin film industry as total. I persoally think that the thin film industry had a prime time show for last 2 years due to artificially high polysilicon price induced high crystalline panel prices. That part of the show is over and with the crystalline panel prices now below 2.50 being feasible the thin film panels would now have to contend with sub 2 dollar pricing and the resultant margin erosion. Most thin film mfg also has the significant capex requirements with limited addressable market. Most like FSLR would have limited market in terms of power plants and they have limitations on roof top whether residential or commercial. This would mean their addressable market is probably arond 35% of the total and even in the utility projects high efficiency solar panels would have significant cost advantages over thin film in what the the utility industry looks for in terms of levelized cost of energy production(LCOE)
So the conclusion I would draw is a healthy growth for the crystalline industry in the coming years and a down ward journey for thin film.

Need Cash? See Suntech

Dean's comments are very insightfull. It is clearly foolish to invest in such a high level in upstream value chain when the market is at peak margin for the upstream players specially the poly silicon. Most players of poly silicon are upstart companies with very limited exposure to technology. Nitol, Shunda , Asia Silicon and Glory are all in the same boat. STP has simply over paid these guys just to get long term contract and would have got much lower levels of entries if only they had waited for few more Quarters. May be the pressure of seeing their stock price going down too much and they needed to shore up their supply specially after the disastrous start with Louyang poly silicon where STP was one of the first to sign up. Obviously they have not learnt from their experience and have their money locked up at much higher penalty. May be the slow down in supply from MEMC for last few quarters also might have had an impact on their strategic planner. Overall I find the silicon contracts of STP are all at higher prices than what one would consider as more reasonable long term contracts and during the next down turn in prices they would have lot more to explain. Poly clearly is at a high point for last few quarters and the peak probably was around March 08. With peak behind us the slide is likely to be lot more faster for poly prices and hence the impacts to STP
It is also worthwhile to note that the current peak is also due to multiple levels of poly contracting by cell, ingot and wafer companies which clearly has lead to the current situation of contracts being far in excess of the real demand.
I am neither long or short on solar companies at the moment but do expect the solar stocks to be available at bargain basement prices over the next 6 months and holding my war chest to pick at lower levels. I suppose I do not have to wait long!! May be 4 to 6 months at the max.