[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?

[explo 648]

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?

[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.

[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.

[explo 648]

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.

[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?

[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.

[Pop2mollys 416]

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....

[Guest ILOVEPV]

http://custom.fmg.dowjones.com/custom/tdameritrade-com/html-story.asp?guid=%7B6f435e14-c5ec-44cf-915a-d49b00a765f8%7D

[explo 648]

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.