Bioenergy, Solar, Wind Power

Land of giants: PV majors making waves

Issue 2 and Volume 11.

In this, the second of our two-part look at the world’s most influential PV players, the good news continues with a largely positive outlook among the world’s leading PV companies. David Appleyard reports.

Although some supply chain issues have arisen in the solar photovoltaic sector with regard to raw materials such as silicon, the market continues to boom. Indeed, these supply constraints have been caused entirely by the fact that the market, and consequently demand, has accelerated at such a phenomenal pace that it has left the supply chain infrastructure lagging behind. However, this situation is expected to be rectified over the coming year as new silicon supply sources come on stream. This situation is inevitably reflected by the major players, some of which have struggled to expand as rapidly as the market would allow.

Conergy AG

In the face of poor operating results, in part due to delays in the delivery of solar modules, Germany’s Conergy recently set out to reposition itself as a focused PV supplier.

The measures set out by Dieter Ammer, Chief Executive of the company, include discontinuation of non-core activities in bioenergy, geothermal, and solar thermal as well as the production of wind turbines in order to focus on PV. Indeed, just a few weeks ago Conergy hived off its solar thermal operations in Althofen, Austria to former employee David Klemen following similar divestments in the Netherlands and Belgium at the end of February. This process should be completed by the end of the year, Conergy says.

A holding company structure with three independent segments – Components, Sales and systems, and Projects – was formed on 1 January 2008, limited to a few central functions.

The Components sector will comprise all manufacturing, including the new, fully integrated solar energy plant in Frankfurt (Oder) which began ramp-up last summer. Sales and systems will comprise the operations of Conergy and SunTechnics – which has branches in the US, South Korea, India and Singapore – while Projects comprises the Epuron business.

Losses before interest and taxes for the 2007 financial year are expected to be €194 million, a revised forecast which Conergy says takes into account a significant deterioration in the operating result that has been burdened by delivery delays and one-off items. The previous 2007 sales target had been 51.25 billion, together with a doubling of net income for the year to over €60 million. Restated provisional figures for full year 2007 give sales of €712 million compared with €682 million in 2006, when an €8 million profit was recorded.

Despite this, the most recent published results for the company show nine-month revenue up 67%, to €641.1 million, with foreign revenue tripling to around €370 million. Nonetheless, the revenue failed to meet expectations, with the delays impacting third-quarter sales by around €130 million and pushing the group to a €10 million loss on the quarter.

Conergy, which employs around 2500 staff worldwide, is expected to shed around 500 staff as a result of the shift in direction that has seen it abandon its 50/50/08 strategy. It had aimed to achieve more than 50% of total revenue abroad from 2008, actually 53%, as well as more than 50% through complementary renewable energy products such as solar cooling, solar thermal systems or bioenergy. Conergy had long acknowledged that these were ambitious aims, not least because its core PV business continued to post strong growth.

The restructuring measures have garnered support from the financial community and Conergy recently secured follow-up financing from a consortium of Commerzbank AG and Dresdner Kleinwort for a total of €240 million. Conergy intends to use the additional funding mainly for necessary investments including the purchase of materials for the Frankfurt plant.

The long-term supply of materials, which has been secured and which begins this year, will enable the factory to work at part-capacity in 2008 and at full capacity from July 2009 onwards. In the €250 million first phase of construction, name plate production at the Frankfurt facility is 300 MW for wafers, 275 MW for cells and 250 MW for solar modules.

In October Conergy reached an agreement with wafer manufacturer MEMC Electronic Materials, headquartered in Missouri, USA, for the supply of wafers valued at $7–$8 billion up to 2018, with supplies beginning in July. With the agreement Conergy secured 40% of its total raw materials requirements for 2008 and even without further expansion stages, it says 80% of its requirements are covered for 2009 and over 100% from 2010.

For the 2008 outlook Conergy expects significant growth in sales to more than €1 billion for continuing operations and is targeting break-even EBITDA, although it expects significantly negative earnings before tax in the high double-digit millions.

For 2009, a positive operating result (EBIT) in the double digit million region is anticipated and from the second half of 2009, the company is aiming for margins in line with the industry, with the solar factory in Frankfurt working at its full 250 MWp capacity. The company adds that electricity generated from its PV modules may reach grid parity by 2014.

Isofoton


For Malaga-based Isofotón, created in 1981 as a spin-off of a university project dealing with the industrial development of a technology for the manufacturing of photovoltaic cells, both rural electrification projects and the grid-connected market constitute important growth bases.

Consequently, Isofotón distributes its activity equally between the industrialized world and the developing world, with both representing growing sources of demand in the solar industry. For instance, Spain presently has the highest growth rate for grid-connected systems, it says.

Isofotón’s production site, in the Technological Park of Andalucía – Parque Tecnológico de Andalucía (PTA) – which was inaugurated in 2006 following a move from its former facilities – has more than 28,000 m2 of factory space, which has enabled the company to increase annual cell production capacity to 85 MW. Nonetheless, in January 2007 a factory extension for an additional 33,000 m2 was started. The first part of this three-phase development is due for completion by the year end and will see the company’s module capacity grow to 150 MW from the current 70 MW, while cell capacity is planned to grow to 180 MW over the year. In the second and third phases of development, production will increase to some 300 MW over 2009 and 450 MW of cell capacity by 2010. Final module capacity, meanwhile, will reach 250 MW with additional cell production sold to third party manufacturers or to future Isofoton module production sites located in developing markets. The new automated facility will be capable of processing 150 µm wafers by 2009–2010 from the current 180 µm thickness, Isofotón adds.

The company also started construction of a new polysilicon factory in Los Barrios, in Cádiz, in 2006. Civil works at the site are under way and pilot production is planned for early 2009, ahead of full production by the July of that year with an initial capacity of 600–1200 tonnes of Si annually. By 2010 the plant will be close to its full production of 2500 tonnes, equivalent to 300 MW of cells. However, capacity at the plant could be increased to some 5000 tonnes annually if alternative, cheaper, sources of silicon currently under development do not materialize by 2010. A decision then could see additional production begin by 2011, Isofotón says.

In addition, Isofotón also has a factory in China, which it says is part of its model of exterior growth, that produces some 30 MW of systems annually. The products, such as solar lanterns, manufactured at the Chinese site use wafer materials that in a large part are discarded during the production process in the factory in Malaga. The products developed using these materials are consequently highly competitive, both on the local market and in dozens of countries which use the company’s modules in rural electrification plans, Isofoton says.

Investments are in three crucial areas, Emiliano Perezagua, Isofotón’s Chief Operations Officer tells REW, saying ‘On one hand resources are to be ploughed into the development of a polysilicon plant in Spain in order to guarantee supply stability for the necessary raw materials.’ This is in addition to three take or pay silicon supply contracts equivalent to 100 MW signed in 2006–2007 that run until 2015. Perezagua says this will allow the company to realize full production capacity at the new factory in the PTA.

A second area of investment will see the company attempt to intensify its presence on an international scale, occupying positions in emerging markets such as China. Indeed, Isofotón is already present in more than 60 countries, exporting 40% of its total production in 2007.

Lastly, the company says it will continue with investments in R&D. The factory contains new research laboratories which are to focus on improving cell efficiency and new concentration cells, together with large European research projects in both PV and solar thermal. In 2007, Isofoton invested some €18 million on research and development, 6% of the annual turnover, and has 56 dedicated research staff. R&D investment is expected to rise to €24 million this year.

Photowatt Technologies


With a current turnover of €120 million and 800 employees, Photowatt Technologies is the only French vertically integrated manufacturer of photovoltaic wafers, cells and modules, supplies PV modules, inverters, and turnkey systems.

Photowatt is part of the Canadian group Automation Tooling Systems Inc. (ATS), North America’s largest manufacturer of turnkey automated manufacturing and testing systems, and as a result, is able to integrate the latest technological advances in the field of automation. Meanwhile, Matrix Solar Technologies, another company in the ATS Group, provides marketing and management skills to assist the growth of Photowatt International on the American market.

According to the latest figures available for the group, sales for Photowatt France increased to 11.6 MW from 8.2 MW in the third quarter of fiscal 2007, with metallurgical silicon products, which were sold at up to a 10% discount to polysilicon modules, accounting for 55% of revenue. Total modules and systems represented $28.8 million of third quarter revenue, compared to $1.4 million a year ago and their average selling price increased by 4% from the second quarter.

Revenue from polysilicon modules and systems was $22.8 million in the third quarter, compared to $38.1 million a year ago. Consistent with the general market trends for solar modules, average selling prices for polysilicon modules and systems decreased approximately 5% compared to the third quarter of the previous year.

Average cell efficiencies improved to just over 13% for the cells and just over 15% for polysilicon.

Photowatt’s total third quarter revenue was $51.7 million, 32% higher than in the third quarter of the previous year, primarily as a result of a 41% increase in total MWs sold. This growth resulted from increased ingot, wafer and cell production capacity at Photowatt France coming on line in March 2007. For the nine months ended 31 December, revenues increased 22% compared to the last nine months of 2006. Higher revenues reflect an increase in sales at Photowatt France to 30.5 MW from 22.8 MW.

On the downside, the company acknowledged the increased costs of polysilicon feedstock due to industry shortages, greater use of externally-purchased wafers and bricks and lower average cell efficiencies, including slightly lower efficiencies achieved on polysilicon-based cells compared to a year ago due to the use of lower-grade silicon.

A decline in average selling price per Watt due to the increased proportion of products and an overall decrease in industry price per Watt for polysilicon modules also impacted on results, the company says.

Production capacity reached 60 MWp by the end of 2007 and though Photowatt has specific expansion plans for its site at Bourgoin-Jallieu, near Lyon in France, it declined to reveal details.

A spokesperson for the firm declared that the company has secured sufficient raw materials for all of its planned production, including any plans for expanded capacity, but declined to name the supply company with which it says it has long-term agreements.

Recent deals include a three-year agreement announced last October that will see Photowatt supply EDF Energies Nouvelles with its modules.

Photowatt will provide EDF Energies Nouvelles with 10 MW annually from 2008 through to the end of 2010, for a total of 30 MW. In addition, EDF Energies Nouvelles has the option of ordering another 7.5 MW in 2008 and another 15 MW per year in 2009 and 2010.

Photowatt says its growth is based on two major strategies. First, through R&D innovation on cell efficiency and processes. Secondly, it intends to continue with cost reductions.

Sharp Corporation

At the end of 2007, Sharp claimed it became the first company to reach 2 GW in cumulative solar cell production volume, with annual production for the year reaching 363 MW. It estimates that the current cumulative solar cell production volume worldwide is some 8 GW.

In 2007, Sharp started operations at its Toyama plant in Japan for the manufacture of silicon for solar cells and more recently, in February 2008, it announced a collaboration with a production equipment company to develop equipment for manufacturing thin-film solar cells, giving the company a foothold in everything from raw materials to devices across a range of technologies, including polycrystalline and thin-film. In 2005, Sharp began mass production of tandem thin-film solar cells, for instance.

Sharp adds that the end of the 2009 financial year (March 2010) will see the start of operations at its new thin-film solar cell plant in Sakai City, Osaka prefecture in Japan, which will have an annual capacity of about 1 GW, the cost of generating solar power will be about half current levels in 2010. This, says Sharp, will be equivalent to around ¥23/kWh (US¢22/kWh), which is close to the current cost of domestic electricity.

In its latest available results, for the six months ending September 2007, profits were lower than the same period last year, partly due to a decline in profits for solar cells resulting from shortages and soaring prices of raw materials.

Nonetheless, Sharp said prospects are bright for increased procurement from outside raw material manufacturers during the latter part of the second half of this financial year. The company further anticipates that the increased production resulting from these measures and the Toyama plant, where it is conducting in-house production of silicon, will lead to improved profitability in this area and stability of supply.

Solar cell sales for the first half of fiscal 2007 were ¥68.2 billion ($658 million) down 15.5% over the same period last year due to shortages of raw materials. As a result, the company has updated projections for fiscal 2007 as a whole from ¥160 billion ($1.54 billion) to ¥150 billion ($1.44 billion), nearly at the same level as the previous year.

In addition, a full-scale expansion of thin-film solar cells is planned. Sharp is to increase its annual production capacity for thin-film solar cells at its Katsuragi plant from the current level of 15 MW to 160 MW by October 2008 with a ¥22 billion ($212 million) investment. Katsuragi is also the site of its crystalline cells, which currently has a manufacturing capacity of 710 MW. The facility will combine plants for LCDs, solar cells, and supporting industries, the company says. The plant, in Nara Prefecture, Japan, is expanding production ahead of the opening of the new thin-film solar cell plant in Sakai City.

Both the LCD panel plant and the solar cell plant are set to start production by March 2010. Plans call for an annual production volume of 1000 MW a year for thin-film solar cells with the development project, including land acquisition costs, coming in at a total of ¥380 billion ($3.66 billion). Sharp is making thin-film solar cells with a triple-junction structure, which consists of two amorphous layers and a microcrystalline layer. With these cells, it has achieved module conversion efficiencies of approximately 10%, it says.

Schott Solar GmbH

Latest available figures for Alzenau-based German solar powerhouse Schott Solar reveal that the international market for photovoltaics continues to grow strongly, although the sector is being affected by a temporary supply shortage of silicon raw material, which Schott says will most likely be overcome by 2008.

In 2007, total PV production capacity worldwide for the company was 130 MW and the company plans to increase this to 450 MW each of crystalline solar cells and modules and additional capacity of 100 MW in thin-film technology by 2010.

Schott Solar already operates one of the world’s most modern fully integrated manufacturing plants for wafers, cells and modules and has also invested some €60 million to establish serial manufacture of thin-film solar electricity modules.

Schott has recently commissioned a €75 million manufacturing facility for its ASI® thin-film modules in Jena, Germany, to produce its amorphous silicon technology.

With a total capacity of 33 MW annually, the site became operational in the autumn of 2007. Schott says the use of amorphous silicon requires only about one gramme of semiconductor material per square metre of pane area and that the thin-film modules can be integrated into window, roof or facade glazing. Major projects using the technology include the roof of the Stillwell Avenue subway station in New York, which uses 2800 thin-film modules over an area of 5000 m2, making it the world’s largest building-integrated photovoltaic installation of its kind. Indeed, Dr Udo Ungeheuer, Chairman of the board of parent company Schott AG, has emphasized the strategic importance of the new production facility.

Furthermore, the company is also busy developing PV modules and receivers for concentrated solar power (CSP) plants, having recently broken ground on its new facilities in Albuquerque, New Mexico.

Plans to develop the site, located in the Mesa del Sol region, which is due to begin operations in spring 2009, call for investments of some $500 million and will see the workforce expand to around 1500 people.

Initially, the company will construct a 200,000 square-foot (18,580 m2) facility with an investment of approximately $100 million to start production in New Mexico, although the new site is designed to support expansion of both its photovoltaic module and solar receiver lines. The building is scheduled to be completed at the end of the summer with the first receivers set to roll off the production line in March 2009, followed by the first PV panel in April. The facility is scheduled to have an annual PV production capacity of 64 MW.

‘According to both industry analysts and our projections, the market for solar energy will double over the next five years,’ said Ungeheuer in announcing the development.

The new site will join the company’s existing facility in Billerica, Massachusetts, which has a capacity of 15 MW of PV modules annually.

Recently, Schott also announced a new joint venture with Wacker Chemie for the production of multicrystalline silicon ingots and wafers to support its planned growth. Solar wafers produced by the joint venture are planned to expand in stages, reaching 1 GW by 2012.

The company also continues with its product development and in December announced that advances in its surface texturing technology had increased cell efficiency.

ISO Texture, as the new structure is called, was developed by Schott Solar with the aid of research institutes and the German plant building industry and makes the entire production operation more efficient, the company says.

Suntech Power Co., Ltd


With four production sites at Wuxi, Luoyang, and Qinghai, and a plant under construction in Shanghai, China’s Suntech says it is the largest solar module manufacturer in the world. It has some 7000 employees worldwide.

The 1 GW Wuxi facility was completed at the end of the third quarter of 2007, while the first phase of the thin-film R&D and manufacturing facility in Caohejing Hi-tech Park in Shanghai, is expected to begin operation in 2008, reaching 50 MW of thin-film cell production in 2009.

Total shipments for the fourth quarter of 2007 were approximately 110 MW and total net revenues grew 82.5% year-on-year to $397.5 million. This compares with full year figures of 364 MW shipped and an impressive 125% growth in total net revenues to reach $1348 million. Furthermore, this follows third quarter results which saw total net revenues grow by 137.3% year-over-year to $386.7 million.

Suntech’s PV cell production capacity increased to 540 MW as of the 2007 year end and the company says it is on track to reach 1 GW of capacity by the end of 2008. This is up from the 420 MW seen at the end of the third quarter of 2007. The majority of this expansion will occur in the second half of 2008, it says. Strong demand, expanded silicon procurement, and the anticipated benefit from economies of scale associated with capacity expansion, saw Suntech raise the year-end 2008 PV cell production capacity target from 600 MW to 1 GW, two years ahead of the previously announced target for 2010.

Commenting on the results Dr Zhengrong Shi, Chairman and Chief Executive of the company, said: ‘We have a strong sales pipeline for the full year 2008 and expect robust demand to continue in 2009 as new solar markets in countries such as Italy, Greece and South Korea grow to complement demand in Germany, Spain and the US.’ The company opened sales offices in Germany, South Korea and Spain over the course of the year and Jerry Stokes, President of Suntech Europe, has outlined plans to open more offices in Europe over 2008, in Italy, Greece and Switzerland. In South Korea, meanwhile, which has feed-in tariffs of more than US $0.70/kWh and a target of 1.3 GW of installed PV capacity by 2011, Suntech is collaborating with Hyosung Corp to complete the first stage of a 3 MW solar system for Korea Western Power Co Ltd.

Referring to the company’s silicon supply, Dr Shi added: ‘We successfully developed a strong silicon supply pipeline of 530 MW for 2008. Suntech’s silicon outlook for 2009 is even more promising.’ Shi continued that silicon supply contracts signed in the fourth quarter will see the company’s silicon costs will fall more than twice as fast as projections of their average sales prices in 2009. These contracts include a deal with Asia Silicon for $1.5 billion worth of silicon over a seven-year period with the cost decreasing to below $40 per kg; a seven-year contract beginning in 2009 with Nitol Solar; the purchase of 510 MW of silicon wafers over a four-year period beginning in January 2008 from wafer manufacturer ReneSola, and a Korean conglomerate is to provide silicon wafers over an eight-year period with delivery beginning in 2008. A second agreement provides for the supply of predetermined volumes of silicon wafers over a seven-year period beginning in 2009 by the Korean player. In June 2007 Hoku Materials, a wholly-owned subsidiary of Hoku Scientific, also signed a ten-year silicon supply contract worth $678 million beginning in mid-2009. ‘We are confident that this will enable Suntech to expand production and improve profitability in 2009,’ Shi concluded.

The company had previously announced advanced sales of more than 450 MW for 2008.

Suntech expects that greater quantities of reasonably priced silicon will become increasingly available from mid-2008 and based on current operating conditions, it expects revenues for the first quarter of 2008 to be in the range of $370–380 million. Full year revenues are anticipated to be in the range $1.9–2.1 billion.

On the technology front, 2007 saw Suntech move its 20% efficiency Pluto technology into pilot production and has also expanded its BIPV solutions to include co-developed products that are manufactured by Suntech. In addition to an agreement with Open Energy to manufacture their SolarSave(R) PV Tiles, 2007 saw Suntech announce initiatives to produce 10–14 MW of Akeena Solar’s Andalay solar panels in 2008 and to produce Lumeta’s line of roof integrated PV products. Andalay will be distributed in Europe, Japan and Australia under a license agreement with Suntech beginning this year. This is in addition to Suntech’s previous agreement to manufacture Andalay solar panels. Suntech targets sales of over 10 MW of the Andalay solar panels to the licensed regions in 2008.

Sanyo Electric Co., Ltd

In a series of planned capacity growth targets through to the end of the decade, Japan’s Sanyo expects to produce some 260 MW of mono-crystalline PV capacity over the current financial year. This will rise to around 350 MW for the 2008 financial year, increasing to more than 400 MW in 2009 and more than 600 MW for 2010.

The company has allocated some ¥80 billion ($708 million) in solar and energy-related products by the end of the 2010 financial year and, of this amount, about half will be invested in its mono-crystalline operations.

More specific numbers may be available following the announcement of a new three-year ‘Mid-term Management Plan,’ which is to cover fiscal year 2008 through fiscal year 2010, and which is slated to be announced sometime around the beginning quarter of the next fiscal year, due just after REW goes to press.

In the meantime, the company continues to press on with its technology developments, recently announcing plans to establish a new Advanced Photovoltaics Development Centre within its Anpachi plant in Gifu prefecture, Japan, that will promote the development of next-generation thin-film cells.

Dr Shinya Tsuda, Sanyo Vice President and General Manager of R&D Headquarters, commented, ‘Sanyo considers next-generation thin-film silicon solar cells as the third generation of solar cells, following amorphous and Heterojunction with Intrinsic Thin-layer (HIT) solar cells [composed of a single thin crystalline silicon wafer surrounded by ultra-thin amorphous silicon layers.]’ Tsuda added, ‘Based on a medium- and long-term perspective, we will begin full-scale development of next-generation thin-film silicon solar cells in order to meet demand for highly efficient but much cheaper solar cells as well as HIT solar cells to meet higher-end needs demanding the world’s best efficiency.’ In mid-2007, Sanyo announced that it had broken its record for the world’s highest energy conversion efficiency for practical-sized crystalline silicon cells, reaching 22.3% at a research level for its proprietary HIT technology.

The company announced its ‘Next Generation’ programme for HIT cells in 2006, with its goal of becoming a top-level business in the global solar industry by 2010.

Also included in its business expansion strategy to more than triple the PV cell business compared to 2005 levels was the aim of increasing energy conversion efficiency of mass-produced HIT solar cells to over 22% by 2010 using wafers thinner than 150 µm. This year it aims to sell modules with cell conversion efficiencies higher than 18%.

Sanyo had previously announced that it will invest some ¥2 billion ($19.3 million) rebuilding part of its plant in Otsu City, Shiga prefecture, to allow the production of HIT modules, operations which currently take place at the Nishikinohama plant, in Osaka, and the Unnan City site in Shimane prefecture.

Production output of 40 MW is planned at the Shiga site by the end of the 2007 financial year, and production will be expanded further in 2008, the company says. The announcement followed a similar one just weeks earlier in which Sanyo said it would considerably expand HIT cell production capacity at Nishikinohama and Shimane.

By investing approximately ¥9 billion ($87 million) in new production equipment at Nishikinohama Plant, production capacity will increase to 210 MW this financial year. In the 2008 fiscal year, Sanyo will invest approximately ¥10 billion ($97 million) in Shimane with a view to start operations in September 2008. As a result, cell production capacity at Shimane will increase from the current 50 MW to 140 MW.

Module assembly takes place in four locations, including two locations in Japan, one site in Hungary and one in Mexico.

In order to ‘deal with the silicon material problem’ Sanyo has said it will make thinner wafers and at the same time increase solar cell conversion efficiency. In addition, the company says it will look at forming new alliances to expand procurement of silicon material, which will ‘clear any bottlenecks for business expansion.’ Sanyo also plans to develop a new type of HIT solar cell that uses polycrystalline wafers.

Although PV products are not specifically listed, latest available figures for the company’s components operations, which includes semiconductors, electronic components, and PV modules, accounted for ¥121,015 million ($1.17 billion) for the nine months ending 31 December 2007, a more than ¥5.5 billion ($53 million) increase over the previous year’s equivalent figures.

SunPower Corporation

In releasing its fourth quarter and full year results for 2007, SunPower outlined its growth plans for the sector, together with substantial silicon agreements to support that growth.

At the beginning of 2008 the company had a name plate capacity of 214 MW, a figure which is expected to rise to 414 MW by 2009 and 574 MW by 2010. SunPower declares that it has silicon supply agreements in place to cover more than 250 MW, 430 MW, and 650 MW for each of these years.

Total 2007 revenue of $774.8 million was up a whopping 227.6% year-on-year, with fourth quarter revenue alone up to $224.3 million, a growth of 201.1% compared to the 2006 equivalent quarter figure of $74.5 million.

The components segment, which primarily represents products sold to installers and resellers, accounted for $100.4 million of fourth-quarter revenue, a 31.1% increase from prior-quarter revenue of $76.6 million. The systems segment, which generally represents products and services sold directly to the system owner, accounted for $123.9 million of fourth-quarter revenue, a 21.4% decrease from the prior-quarter revenue of $157.7 million.

Third-quarter revenue was significantly influenced by large scheduled project installations, particularly the Nellis Air Force Base project near Las Vegas, at more than 14 MW the largest photovoltaic power plant in North America.

Commenting on the results Tom Werner, SunPower’s Chief Executive, said: ‘The global solar market delivered strong, dynamic growth in 2007. In the latter part of 2008 and beyond, we expect our industry’s silicon feedstock to become more abundant, leading to lower solar panel prices which will redistribute the power and profit pools in the value chain. SunPower has been preparing for this development for the last two years by vertically integrating downstream.’

On the back of its 2007 results, SunPower raised its guidance for the 2008 fiscal year, with an expected total revenue of $1.2–1.3 billion. ‘We expect our 2009 total revenue to increase 40% to 50% from 2008 levels,’ said Werner.

‘SunPower continues to benefit from strong demand…in Europe, the United States and Asia,’ added Werner, a reference in part to a 60 MW series of deals for solar power plants in Spain and a 2 MW project in South Korea. Reflecting this market growth, in February SunPower closed the acquisition of Italian systems integrator Solar Solutions, now named SunPower Italia, while 2007 also saw the company announce financing facilities with Morgan Stanley for $200 million, and GE Energy Financial Systems, which closed an 8 MW deal serving five US customers. It is also expanding production of its Generation 2 solar cells, which it claims have efficiencies exceeding 22%.

Upstream, the company says it is following a portfolio strategy, developing a diversified set of silicon suppliers from polysilicon to ingots and wafers that, it says, substantially increases its silicon supply for 2008.

In the fourth quarter, for instance, M.Setek began polysilicon manufacturing using internally-produced TCS gas, which SunPower believes will stabilize ingot deliveries. In January 2008, DC Chemical delivered its first sample of polysilicon to Woongjin Energy, SunPower’s ingot-pulling joint venture in Korea. And, in recent weeks, SunPower announced a 3 GW multi-year silicon supply agreement with China’s Jupiter, Qingdao DTK Industries Co., Ltd., starting in 2010 and continuing through 2016. Jupiter, Qingdao DTK will build a new polysilicon manufacturing facility in Qingdao, China, in order to produce the polysilicon supplied under the terms of the agreement.

In December the company announced an ingot-pulling and wafering agreement with Jiawei SolarChina, a company affiliated with its long-term solar panel partner in China. SunPower also recently announced a 2500 MW set of polysilicon agreements with NorSun and its joint venture partners to be delivered from a new polysilicon plant in Saudi Arabia, while Hemlock Semiconductor Corp signed a 2 GW, 10-year polysilicon supply agreement under which SunPower will begin taking deliveries in 2010. Wacker Chemie AG also expanded an existing agreement with a 53 MW, three-year polysilicon supply agreement to begin delivery in 2010.

‘Across our portfolio of silicon supply agreements, we expect to have sufficient silicon in 2010 to achieve more than six times our 2007 production,’ said Werner, adding: ‘New supply agreements that begin delivery in 2008 will support manufacturing cost reductions by reducing our average feedstock price for the first time since we began commercial solar cell production.’

SunPower plans to reduce installed system costs by 50% from 2006 levels by year-end 2012 and expects to achieve several manufacturing milestones in 2008, including substantially greater manufacturing scale, a successful transition to second-generation products and a shift to thinner, 145 µm wafers.

David Appleyard is Associate Editor of Renewable Energy World.
You can contact David Appleyard at [email protected]

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