Solar PV Investor Forums

http://finance.yahoo.com/news/yingli-gre…-032200033.html

Very nice, but Flour does the EPC, YGE only supplies modules. Still a very good module contract for US market.

In terms of big EPC contracts for our solar 11 I think LDK still leads with the major contracts awarded by Gansu province.

http://investor.ldksolar.com/phoenix.zht…01889&highlight=

In terms of business model I don't think EPC is a golden vertical over time, it's just now due to the module glut and legacy FIT rates based on pre glut cost levels. CSIQ model of going further down to developing and possibly owning project for sale should be more profitable mid-term if you are a good developer. But CSIQ focus is on small 10 MW projects, not 200 MW projects. Long-term I think the GCL and SOL model of doing all and keeping and operating the finished plants, i.e. the power generation segment is the final way these companies need to go to secure revenues and profitablity over more than a 10-20 year period ahead, since electricity is consumed much faster than a panel and demand is insatiable. For GCL it is already their strategy. SOL is doing this more to learn its end market for now, i.e. understand what customer needs and how their products work when applied for power generation, so that they can improve their products to consider all aspects of actual application. Their goal now is to be broad, i.e. rather one plant in every geographic market for maximum learning of different site requirements, than betting on the downstream segment in one market.

Good posts today/yesterday explo and odyd...

That's an interesting subject between owning to operate, as opposed to owning to sell. When CSIQ first announced the Skypower deal, I thought they were getting into the power generation business, but they later clarified that's not their business model. When asked during one of the CC's, Potter commented that they could get a better IRR long term than on just the sale of the plant, but that they get a better overall return by re-investing that freed-up capital in new plants.

I would think that selling the plants and re-investing in new plants is the better plan, as long as you have a strong backlog of profitable projects. If opportunities and/or margins get tight on project type work (I can see this in places like China), then I could see the own & operate model becoming a better choice, but to do it on a large scale would require a significant capital investment in each plant, and most of the solar's balance sheets are pretty stretched right now. Keep in mind the IRR's on operating a plant will continue to go down also as FIT's are reduced or eliminated, but should still be reasonable. But long-term, I do see the build, own & operate model becoming more prevalent...maybe keep 1 out of every 5 you build, or something like that. Having long term visible revenue streams is never a bad thing.

One interesting note on most of CSIQ's EPC and Development project news, is that they will also maintain and operate these plants after project completion or sale. A small but steadily growing stream of visible, profitable revenue with no risk of capital.

Nano I agree with all your points. Even if the strategy is to own plants, you can build your plant portfolio faster if you only keep a portion of what you develop while the market is growing fast, since building and selling grows capital faster to fuel new project. Once the portfolio reaches critical mass it can fuel its own growth.