Solar: it’s about time
Global green-technology venture capi- steady growth. 2009, and the consensus from an analyst
tal jumped nearly 40% in 2008 to US $8.4 • JA Solar (Chart 12) believes that in- poll from The Wall Street Journal in 12’08
billion, with solar investments reaching creased demand for “lower ASP (prod- expects the U.S to reach bottom 4Q’08
(approx) US $3.3 billion. The U.S. had 241 ucts) will suppress revenue in Q4.” and GDP to step up to positive territory by
disclosed clean-technology VC invest- • Solarfun (Chart 13) believes that lower 3Q’09 (Chart 16).
ments valued at US $5.8 billion in spite of polysilicon costs and manufacturing This global recession has been unprece-
the recession. Acquisition 0pportunities bases will enable it to weather down- dented in speed and severity, and there are
continue to arise for companies with cash turn. few industries that have been able to equal
reserves. • Suntech Power (Chart 14) has seen a this industry’s growth. Over-expansion has
fast decline in sales prices and defer- become a concern as demand continues to
The Balance Sheets ment of customer orders and expects retract, especially in grid residential. Grid
Q4 company guidances (released in Q3’08) revenue to drop more than 50% Q/Q utility and commercial appear resilient.
were mixed. Order cancellations and in 4Q. Rising oil prices will continue to be a
declining ASPs were apparent, but many two-edged sword that increases demand
companies remained optimistic that order Conclusion while increasing costs. Look for material
backlogs and strong balance sheets would U.S. Federal Reserve slashed GDP growth prices and shipping costs to head north as
enable them to weather current business projection for 2009 to a range of -0.2% oil prices rise. Housing remains the catalyst
conditions. Inventory levels rose sharply to 1.1% and world GDP fell from 4.65% for a recovery, and the upcoming loan
for many solar companies from 2Q’08. annual growth in 3Q’07 to 3.7% growth in resets threaten to prolong the foreclosure
For example: 2Q’08 (Chart 15). agony. Q3’09 is cautiously optimistic, and
• Evergreen Solar (Chart 10) expects its Our colleague, Ed Henderson, from early 2010 is more probable.
revenue to grow by at least 100% y/y. Henderson Ventures, expects Japan, the Here are some highlights from the Pro-
• GT Solar (Chart 11) has a ‘healthy European Union and the United States cess Equipment and Installations sectors.
backlog’ of furnaces to continue with to experience negative GDP growth in We cover the entire food chain in our daily
20081110 20090102
First Solar, Inc. 50 MW/Year Production Costs
Revenue, Net Income & Inventory
Cost ($/W)
1.20
Depreciation
$ Millions
SG&A
400.0 Materials
+119% 1.00
Overhead
Labor
300.0
0.80
200.0
0.60
100.0
0.40
0.0
0.20
-100.0
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3
05 06 07 08
Revenue 8.5 9.4 16.6 13.6 13.6 27.9 40.8 52.7 66.9 77.2 159.0 200.8 196.9 267.0 348.7
0.00
Income -0.7 -0.2 1.7 -7.2 -5.9 -2.5 4.3 8.0 5.0 44.4 46.0 62.9 46.6 69.7 99.3 Wafer Cell Module
Inventory 6.9 9.8 7.9 10.5 16.5 15.0 26.8 31.9 40.2 58.6 106.9 126.5
Total cost = $2.11/W
CY FSLR
PJC Poly Si Supply & DEmand Analysis 12/08
Chart 7. Chart 8.
20090107 20081018
BUSINESS CYCLE
Evergreen Solar, Inc.
Supply Chain Effect
Revenue, Net Income & Inventory
%Growth
45-55
Panels $ Millions
10/16/08
Inventory
60.0
Cells "While the macro economic environment remains
Increases
Raw Materials
challenging, our technology, business model and
+21%
customer base all remain fundamentally strong, as
Process Equipment 40.0 evidenced by the two long-term sales contracts we
recently signed, and as such, we remain confident
in our ability to realize substantial profitability in
20.0
2009." 10/16/08
0 0.0
-20.0
-40.0
4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
Inventory
02 03 04 05 06 07 08
Revenue 2.2 1.4 3.2 3.1 1.6 3.1 4.8 6.0 9.7 10.5 10.7 11.2 11.6 11.6 22.0 36.2 32.4 14.1 15.4 18.2 22.2 22.9 22.8 22.1 50.0
Reductions
Income -3.6 -3.2 -15.4 -4.0 -5.9 -4.6 -9.2 -4.6 -3.8 -3.2 -4.5 -4.6 -5.0 -8.1 -7.5 -5.6 -5.5 -6.2 -7.5 -3.7 0.8 -0.0 -8.9-23.9
Inventory 2.2 2.9 2.2 1.9 2.0 2.0 2.3 3.3 2.9 3.2 5.1 3.7 3.6 6.1 11.9 12.4 4.8 5.5 5.0 7.5 8.1 5.2 7.7 12.3
Expansion
Recession
Time
CY ESLR
Chart 9. Chart 10.
14 – Global Solar Technology – November/December 2008
www.globalsolartechnology.com
issue_2.1.indd 14 2/22/09 9:39:54 PM
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