The solar sector had a relatively subdued week, save for a few notable announcements. High-end solar equipment manufacturer SunPower announced that it was acquiring SolarBridge, a microinverter manufacturer, executing on its key theme of improving the energy yield of its panels. First Solar, the largest U.S. solar company, said that it would be expanding its workforce at its Perrysburg Ohio facilities. Chinese solar major Trina Solar said that it would consider setting up manufacturing facilities in India as it looks to expand its production facilities globally.
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SunPower Buys A Microinverter Manufacturer
SunPower announced that it would be acquiring SolarBridge, a venture capital-funded startup that specializes in panel-integrated microinverters for the solar industry. Unlike conventional solar inverters. which are connected to an array of solar panels, microinverters are designed to serve a single solar panel, helping to improve the performance of solar power systems (see Why SunPower Is Buying A Microinverter Manufacturer) The acquisition will allow SunPower to become more vertically integrated and could help it to better customize microinverter technology for its panels. The deal also fits well with SunPower's central theme of improving the energy efficiency and yield of its solar systems, as it tries to differentiate itself in an increasingly commoditized solar market. Financial terms of the deal were not disclosed.
- Trefis has a $33 price estimate for SunPower, which translates to a market cap of around $4.4 billion. Our price estimate is about 13% ahead of the current market price. We estimate the company's 2014 revenues at around $2.7 billion, with an adjusted EPS of about $1.31. This compares to a consensus of around $1.33 according to Reuters.
- SunPower stock fell by around 9% through the last week, as investors were disappointed by the company’s light 2015 guidance.
Trina Solar Plans To Expand Manufacturing In India
Trina Solar, China's largest profitable solar company, intends to set up a manufacturing facility in India over the next few years. The company is looking to diversify its manufacturing capabilities, with plans to derive between 20% to 30% of its production from outside China. India is an ideal market for solar power, given the acute shortage of electricity, relatively high electricity costs and growing concerns about greenhouse gas emissions. The Indian government recently enhanced its solar installation goal, targeting an additional 15 GW of solar capacity by 2019. Trina Solar has a market share of over 10% in India, having supplied about 280 megawatts worth of solar panels in the country.
- Trefis has a $14.50 price estimate for Trina Solar, which translates into a market cap of around $1.20 billion. Our price estimate is about 45% ahead of the current market price. We are modelling revenues of about $2.56 billion for 2014, with an adjusted EPS of $0.83. This compares to a consensus estimate of $0.89 according to the Financial Times.
- Trina Solar’s stock fell by around 5% last week.
First Solar’s Workforce Expansion
First Solar, the largest U.S. based solar panel manufacturer, is expanding its workforce at is Perrysburg Ohio facilities as it adds two new production lines that would increase its annual manufacturing capacity at the plant by around 190 MW. The demand for solar panels in the United States could be strong over the next two years, as installers take advantage of the solar investment tax credit which is set to expire at the end of 2016. First Solar is looking to capitalize on this demand by expanding its panel manufacturing capacity by around 46% by 2015.
- Trefis has a $64 price estimate for First Solar, which translates into a $6.4 billion market cap for the company. Our price estimate is about 30% ahead of the current market price. We are modelling revenues of $3.70 billion for 2014, with an adjusted EPS of around $2.78. This compares to a consensus EPS of $2.75 according to Reuters.
- First Solar stock fell by around 4% through last week.
Yingli Supplies Panels To Bolivia’s First Solar Power Plant
Yingli Green Energy, the world’s largest solar panel manufacturer, has supplied over 5 MW of solar panels for Bolivia’s first solar power plant. The power plant will incorporate both battery storage and diesel generation to ensure continuous power supply. The plant is expected generate 7,500 megawatt hours of electricity annually, meeting about half of the power requirement of the Cobija region in which it is being installed. Bolivia has a low electrification rate (about 77.5%) with a vast majority of rural areas coming off the grid, making it a reasonably attractive market for distributed solar power.
- We have a $3.50 price estimate for Yingli Green Energy, which translates to a market cap of about $650 million. Our price estimate is about 28% ahead of the current market price. We are projecting revenues of about $2.68 billion for FY 2014, with an adjusted net loss of around $0.49 per share.
- Yingli Green Energy fell by around 1% last week.
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