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Solar Cost Comparison: Production Cost And Added The Operational Expense Cost (Opex)

|Includes: CSUN, HQCL, TSL, Yingli Green Energy Holding Company Limited (YGE)

For this article we will look at: Renewable Energy Corporation (REC) a Norwegian solar stock. Yingli Solar (NYSE:YGE) , Trina Solar (NYSE:TSL), China Sunergy (NASDAQ:CSUN), and Hanwha SolarOne (HSOL).

Debt of REC from Q42011 to Q12012:
Interest bearing debt (short+long) q4 2011: 1032 mil $ (6300 mil NOK) Q12012: 999 mil $
Cash and cash equivalents q4: 261 mil $ q1: 308 mil $
Less debt, more cash.

Debt of Yingli from Q42011 to Q12012:
Interest bearing debt (short+long) Q42011:1855,3 mil $ Q12012: 1936,5
Cash and Restricted Cash Q42011: 891.9 Q12012: 674.7
Increased debt, less cash.

Debt of Trina from Q42011 to Q12012:
Interest bearing debt (short+long) Q42011: 909.6 mil $ Q12012: $1,020.4 mil $
Cash and cash equivalents and restricted cash Q42011:896.4 mil $ Q12012: $748.3 mil $$
Increased debt, reduced cash.

Debt of CSUN from q42011 to 2012:
Cash and cash equivalents Q42011: 209.5 mil $ Q12012:233.2
Interest bearing debt (short+long) Q42011: 475,1 mil $ Q12012: 460,3 mil $

Increased cash, reduced debt slightly.

Debt of Hanwha Solarone from Q42011 to 2012:
Cash and cash equivalents Q42011: 314 mil $ Q12012: 303.1 mil $
Interest bearing debt (short+long) Q42011: 613 mil $ Q12012:534,7 mil $

Slightly less cash, less debt.

Time to take a look at another cost of modules, the operational expense (opex):

The theory behind this value metric is to spread the operational costs thare are not one time across the modules shipped for that quarter. That gives an idea on how effective sale channels, adminstration etc is and how much added cost these type of operational expenses add to the modules per watt.

First a summary of the findings:

Company Production cost opex costs in mil $ Average sale prices (ASP shipments q1
Rec 1,0 22,92 0,98 Shipments 191MW
Yingli 0,87 60,3 0,96* Shipments 520MW*
Trina 0,86 58,1 0,92 Shipments 380MW
China Sunergy 0,85* 18,8 0,86 Shipments 79,9MW
Hanwha Solarone 0,92* 23,17 0,83 Shipments 160,7MW

*shipments calculated shipments based on revenue/ASP
*ASP Yingli calculated on gross margin adjusted for one time effects. (11,5 % adjusted gross margin)
*China Sunergy cost: ASP*1-gross profit margin)
*Hanwha solarone production cost if only using internal wafers 0.78

We can then compare producers at production cost and then also add opex cost to compare them:

Company Production + opex Production cost
Rec 1,12 1
Yingli 0,99 0,87
Trina 1,01 0,86
China sunergy 1,08 0,85
Hanwa solarone 1,06 0,92

Opex is adjusted for one time effect where possible.

Yingli Solar q1:

Trina Solar q1

China Sunergy q1

REC q1

Hanwa Solarone

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: I am long in REC in the Norwegian stock exchange.