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SunPower (SPWR)

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Guest chrisceeaustin

It's weird. I've been quite happy investing in SPWR; it's a well-run company. Why don't others here want to invest or talk about SPWR?

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I haven't looked at SPWR, but were't they saved by getting investment from big oil company and acquiring a project company? Aren't their module business in as much problem as other high cost makers? The premium ASP they require reduces the market available to them?

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Guest Klothilde

@chrisceeaustin: My guess is that people look a lot at cost per watt and there the figures of SPWR seem spooky to many. At least that's the reason for me to stay away from the company. Everybody wants cheap power, so selling an expensive panel is not straightforward by definition. SPWR provides value in a few niches where the BOS is so expensive that the savings from higher efficiency panels more than compensate the extra cost (e.g. US residential or Japan). However imho the high BOS costs mainly result from generous subsidies which are not sustainable long-term. As soon as subsidies come down, so will the BOS, and the value of extra efficiency relative to the extra cost evaporates. One very clear example is Germany where SPWR used to be the king of the world. Now that tariffs have been cut almost to the bare minimum you see SPWR practically abandoning the market. If you look at their latest quarterly report you'll see the low revenue and hefty losses they have in Europe lately.

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Guest chrisceeaustin

I agree that they have not made money in Europe for a two or three quarters, as I recall. But their project business is buying them time to reduce their costs, and like others have said, if the ASPs are pretty close, why not go with best quality? That's always been the bet with them. And no reason to poo-poo the project business. That's where the margins are this year, and likely 2014 and 15. That's why I like CSIQ and own a bit of WFR. The big risk for other companies is SPWR's C7 module with the mirrors and all that. They already claim it's the lowest levelized cost of electricity around, and they have not finished testing it in Saudi and some other places. Hubris? Or do they know something? My bet on CSIQ is that they can still build such cheap panels that they can compete with SPWR. But FSLR will fall; STP will fall; others with cheap panels but less experience fall by the wayside. The profits allow them time to lower their costs even further -- their reliability is thorugh the roof -- see their recent top three finishes in that department. I mean their panels took all three of the top three places, REC fell out of the box. And one more thing, the importance of cost is mitigated too by their leasing program. If you pay no money up front, might you be tempted to go with the top quality brand if the benefit is about the same? They can take a little hit on their premium pricing.

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chriscee, No doubt SPWR they have the best panels around. If they get the cost down to not depend on high prices, before the others catch up on the high efficiency positioning then they can be one of the biggest players in global module sales. One thing needs to be understood. The Chinese are not doing what they're doing because it is the only technology option to them. They choose the technology option that will have the biggest market coming 3 years. They like big scale. Chinese panels are currently adding value in more cases than SPWR modules. I read that SPWR panels are based on Chinese wafer technology. My guess is that SPWR module will remain as a Rolls Royce product position and not become mainstream. If they for some reason get costs down a lot. They will be ahead of the Chinese though.

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Guest chrisceeaustin

I wonder what the industry will look like in three years. The cost of the panel will not matter as much; the cost of the panel is already a much, much smaller issue than it was three years ago. Why? Because it is a much smaller part of the total installation price. Poly will be cheaper and less will be needed. The best panels will be made from the GTAT poly. There will be further downstream integration, into projects, leasing, new products, maybe transmission, maybe transportation? Charging fuel cells, etc.? The cost structure of poly to panel will be less important. What will margin come from? From quality, reliability, length of warranty, from efficiency, from charging EVs, from efficiency of transmission, how well it works in a distributed system.... Sometimes I feel that these boards concentrate too much on cost of manufacturing. It is very important, but most of the tanking of ASP has had to do with business strategy. What happens when these companies have to start making a decent profit again? Will cost be as important?

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Guest ILOVEPV

I have been waiting for this move. Nobody knows what is behind the move. I hope it will be retraced enough to pick it again. Same picture takes place for WFR. American based solars were artificially kept too high compared to their Chinese brothers/sisters. It is a high time to close gaps.

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SPWR still up nearly 30% since beginning of February while Chinese solars down 40-60%. Compare q4 earnings and guidance vs. Top Chinese plays and the gap will close sooner or later despite short term trends....

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Very cool. If these high efficiencies can be achieved at low cost than PV will leapfrog as an energy alternative. It's good that they keep pushing the efficiency boundries for commercial products. Costs improvements will come later.

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Guest Klothilde

Good lord. You are not worried about your SOL investment? Let's hope SPWR never becomes competitive and that the machinery gets recycled into H-beams.

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I'm not saying that SPWR will be the mass producer of low cost HP modules. They'll show that it can be done. Like Germany showed how BOS can come down when an industry is allowed to establish and mature. I think we all know who will do the cheapest cooking once the recipe is known.

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Guest chrisceeaustin

SPWR keeps up with the pattern though: highest efficiencies and highest gross margin next to say FSLR(?) Who is to say they won't be cost leader, per watt? They claim that the X-series produces 75% more energy than conventional solar panels. What's conventional? A typical YGE panel? Whatever the case, 75% is a great deal, and I do not think their panels cost 75% more than the conventional panel. And it's much less likely to go bad.

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Guest chrisceeaustin

Since the CC when Werner said that "a lot of the" first projects that Sunpower builds in in Inner Mongolia will be built in Hohhot, there has been another news piece cited in the yahoo mb. This one remarks on a SPWR 4 GW set of projects that are apparently part of the 7.5 GW larger project. Or so I assume. All part of the joint venture deal SPWR has in Inner Mongolia. I can't find this article. But there were plenty of articles that came out mentioning the 7.5 GW goal for Inner Mong. using SPWR C7 concentrated PV panels. Does anyone have a link to the newest article mentioning the 4 GW in projects? By the way, Odyd did confirm that the rather unpublicized agreement is for 7.5 GW and not MW. He said nothing further. Odyd, do you have any further information? And also, I did see a press release regarding the 7.5 GW in projects on one of the Asian JV partner's websites.

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they are all saying 7.5GW and I did confirm this to be the case. However my source was quick to point out that it was MOU, which is always big in scope but never a match in reality.

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Guest chrisceeaustin

Yes, I understand. And this is why I was more encouraged when I saw that someone had posted a new article about 4 GW project within the project and that Werner of SPWR had been talking about the "first" of "lots" of projects in Inner Mongolia. I think this series of projects is under the radar but not for too long, along with the whole C7 phenomenon.

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Guest ILOVEPV

from a TA point of view SPWR raid down is completely justified. In particular there is a gap 6.25 to be filled. I have a big buy order in this area though not sure the stock will be taken so low. Actually all solars are starting to line up for the Q1 reports (JKS is the only late stock, that is why some uncertainty makes JKS an outsider now) ). TSL stucks in 3.50-3.60 area with no move - a slow professionally designed short covering is in effect. YGE is still on a way down and the next leg down to 1.50 area has a big probability (JMHO). As for SOL I am more or less confident that a bottom is around or already reached though I can not exclude a fast short-live raid down to pick stop losses set by prudent investors/traders. If it is a case I prepared to buy really big trading position. As for my yesterday SOL pick I sold it for 1.36 today and set another buy order for the same 1.26 (why not to trade if you have a chance to make some pocket change). Good luck to all.

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Guest solarcat

Does anyone know what process and technology (patents?) SPWR uses to achieve that high efficiency and why someone else can't do that same? Is there something proprietary?

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Guest rational_judgement

SPWR keeps up with the pattern though: highest efficiencies and highest gross margin next to say FSLR(?) Who is to say they won't be cost leader, per watt? They claim that the X-series produces 75% more energy than conventional solar panels. What's conventional? A typical YGE panel?

Whatever the case, 75% is a great deal, and I do not think their panels cost 75% more than the conventional panel. And it's much less likely to go bad.

You are missing an important point. The article says

"...results in approximately 75 percent more energy production over the first 25 years, when compared to a conventional solar system covering the same sized roof..."

The comparison is between physical sizes.

The following comparison is more relevant from cost/watt point of view.

"...The X-Series delivers approximately eight to 10 percent more energy per rated watt when compared with conventional solar panels..."

They are 8 to 10% more efficient. Do their panels cost 10% or more than other makers (for the same wattage rating)?

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