Deutsche Bank analysts report from the first day of meetings at this week’s Solar Power International (SPI) show in Los Angeles, where the early spotlight is on inverter suppliers, and updates from Energy Conversion Devices and Evergreen Solar.
October 13, 2010 – Deutsche Bank analysts report from the first day of meetings at this week’s Solar Power International (SPI) show in Los Angeles, where the early spotlight is on inverter suppliers, and updates from Energy Conversion Devices and Evergreen Solar.
Key themes from all discussions are that demand for solar PV systems continues to look strong heading into 2011 and capacity is ramping “aggressively,” on top of 2010’s expected 100%+ installation growth and despite anticipated FiT cuts in big European PV markets, according to Deutsche Bank’s Peter Kim, in a research note.
Balance-of-system (BOS) technologies, particularly inverters, continue to get a lot of attention. After being the main bottleneck for PV system installations, component shortages (most notably IGBTs) have eased, though supplies are still tight, Kim reports, based on meetings with several inverter/microinverter vendors (Advanced Energy, Power One, and eNphase). Visibility into demand (i.e., bookings) extends “well into 2011,” and pricing is not seen as a competitive factor for now — though “the largest of the inverter suppliers” is pushing cost reduction efforts which should lower costs and pricing long-term.
Other takeaways from the inverter suppliers included pushing inverters beyond power conversion to being the center of power generation and control (reactive power, voltage and frequency stabilizer), as well as handling data — enhancements that sound “very similar to descriptions of smart grid, smart meter, and demand response capabilities,” Kim notes.
The analysts also got updates from two companies. Energy Conversion Devices (ECD), which launched its new PowerShingle module for residential rooftops, spent more time discussing its next-gen modules that aim to boost cell-level conversion efficiency from current 8% to around 10%. Upgrades are slated for development runs at the company’s Auburn Hills 2 facility with a mid-2011 launch. “We believe the upgrade, along with other advances could nearly double the manufacturing line capacity and provide a meaningful cost reduction benefit,” Kim writes.
Also getting some face time was Evergreen Solar (ESLR), which saw its stock surge 27% on Tuesday (and another 15% in Wednesday), despite no official news; Kim suggests it’s due to rumors that GE may be eyeing a PV entrance, viewed as a market legitimizer and a possible M&A suitor (ESLR execs claimed no knowledge of any specific reason for the stock surge). Main discussion points with ESLR were its two-pronged strategy toward profitability: reduce costs by expanding capacity in China and through JV partnerships, and pursuing a standard-sized wafer strategy.
To the latter, the company believes its silicon-saving string-ribbon technology could offer material cost benefit to current ingot and wafering processes. If shown to be “a near drop in replacement for wafers available in the market today, it could drive a substantial reduction in wafer costs,” Kim writes. He says ESLR is developing a furnace to accommodate larger 156mm-wide string ribbons, aiming for larger-scale development by year’s end. A standard-size string ribbon wafer could avoid the need for wire saws and kerf loss (lowering consumption to <4g/W), reduce capital and consumable (wire/slurry) costs, and potentially “significantly reduce the cost of producing wafers,” though “they have a long path to proving this capability,” he writes.
