Americas: Energy: Alternative Energy: Key takeaways from SunPower's analyst day
Key takeaways: costs, technology, and business models SunPower held their analyst day on November 6th in Berkeley, California. We group our key takeaways into 3 areas: costs, technology, and developing business models.
Costs: goals for grid parity, tracking execution, silicon leverage for crystalline players
(1) SunPower re-affirmed their 2012 cost reduction goal of a 50% reduction by attacking all parts of the value chain.
(2) However, in our view, current disclosure makes it hard to consistently track their progress towards this goal. Management did comment that they were considering how to disclose information to help investors see progress.
(3) Finally, the potential for abundant silicon reducing costs for crystalline producers was discussed. While this may prove to be meaningful, it is hard to say how much so given the uncertain amount of silicon costs embedded in companies' current cost structures.
Technology: thin-film vs. crystalline vs. string-ribbon, solar thermal competition, theoretical efficiency limits
(1) There were several discussions surrounding the relative merits of thin-film vs. crystalline vs. string-ribbon technology. We see the least certain future for string-ribbon given that it is lower efficiency than crystalline but more expensive than thin-film.
(2) SunPower discussed their utility-scale power installations and their future potential. We see the potential for solar thermal technology to begin to compete in this space in the future.
(3) During the cell technology session, there were questions about the limited upside to SunPower cells given that their 22% efficiency cells are close to the practical limit of say 25%. While the logic makes sense, we do not feel this is a major issue for the next couple of years.
Developing business models: upstream/downstream integration, owning the power vs. only making the cells
(1) SunPower spent a good amount of time discussing their downstream business. We see this business as giving SPWR a unique opportunity to impact costs through the chain given that installation is about 50% of total cost.
(2) Management also indicated that they are not necessarily averse to owning power versus just selling the module. This could be an upcoming change to the existing manufacture/install-only business model. |
