its because SPWR sells direct, they have a direct arm as of last year, when they acquired this other company called powerlight. Powerlight was an installer who sells direct. that means SPWR now sells direct to whoever be it HP, Whole foods or whoever is doing a direct installation. When SPWR wins one of these a press release comes out, but its pretty tiny sale. When SPWR powerlight bids on a direct contract they may or may not use their own solar semiconductors for it. SPWRs position is that solar chips are going to become commoditized and the money is in the installation - thats why they acquired powerlight.
On the FSLR side they have a different approach. FSLR sells through resellers only with long term supply contracts. Therefore in theory, FSLR could supply to SPWRs powerlight arm. Since FSLR is building mfg capacity in a more agressive manner than SPWR (yes SPWR is building mfg capacity too but its a different beast, since FSLR is proprietary whereas SPWRs silicon based mfg is more of a commodity where they can sell excess capacity etc), FSLR needs to control their income and avoid choppyness at this stage so they sign these huge supply contracts and those are FSLRs customers. Some of the FSLR customers do sell in the US, but right now EU is way more fertile ground with government subsidies that allow FSLR to price at $2.50 per watt. Thats why FSLR is making so much money now, because they are selling all they make to subsidied countries. But they do not need subsidies to make money unlike SPWR. They need higher capacity though.
This PR has FSLRs customers BNB and Econcern which are large installers not one time US customers.
PHOENIX, Nov 5, 2007 (PrimeNewswire via COMTEX News Network) -- First Solar, Inc. (Nasdaq:FSLR) announced today that it has entered into new long term module supply agreements with a subsidiary of international investment and funds and asset manager Babcock & Brown (Australia:BNB), and Ecostream Switzerland GmbH, a subsidiary of Econcern BV, which focuses on developing solutions for sustainable energy supply. The new agreements expand contracted module volume by a total of 557MW, allowing for additional sales of approximately $1 billion at an assumed exchange rate of $1.30/E1.00 over the period of 2008 to 2012. The agreements are structured on terms similar to First Solar's existing long term supply agreements. |
