In January 2011, First Solar (Nasdaq:FSLR) announced the acquisition of RayTracker, a VC-funded manufacturer of utility-grade single-axis trackers. Although the terms of the acquisition were not disclosed, we later learned from Kang Sun, the founder of the tracker company, that First Solar paid approximately $45 million for the tracker firm, which had received $3.5 million in venture funding from Idealab, The Quercus Trust, and Phoenix Fire -- a multiple of more than 12X.
These are the types of multiples that venture firms hope for -- and which have been in short supply in the VC-funded solar world. Other VC-funded firms that have had happy acquisition endings include Ausra (acquired by Areva) and PowerLight (acquired by SunPower).
According to First Solar, the 230-megawatt AV Solar Ranch One, a recent recipient of a $680 DOE loan guarantee with the project just sold to Exelon, "will employ First Solar's FS Series 3 PV Module and deploy its tracking system on a portion of the facility. The technology will increase electricity output by tilting the solar panels to track the daily path of the sun."
When acquired, RayTracker claimed over 5 million hours of tracker operation in the ﬁeld with .9998 measured availability. The firm also claimed that its tracker has fewer moving components per megawatt versus alternative tracking architectures. Importantly, RayTracker claimed that it was the first tracker validated to have 20-year-plus lifetimes without scheduled maintenance. And the firm touted its distributed tracker scheme versus the ganged architecture used in other utility-scale solar farms.
The big question is whether the economics of tracking First Solar's lower conversion efficiency cadmium telluride modules offers the same value proposition as tracking higher efficiency modules. Clearly, First Solar would not install the trackers if it did not improve the energy harvest and lower the levelized cost of energy for the solar field.
Tracking high-efficiency panels, as done routinely by SunPower with its 20-percent-efficiency panels, has a clear economic value on levelized cost of energy. Dan Shugar, CEO of Solaria, and formerly with SunPower, has asserted that trackers are the only way to go with crystalline silicon panels in geographies south of Berlin, Germany.
The value of a tracker is smaller with the 11.7 percent efficiency panels from First Solar. But First Solar's efficiency continues to inch up. And the firm might have a CIGS surprise in store, as well.
In locations with time-of-delivery (TOD) pricing, the pairing of a tracker and its increased energy harvest in peak summer months along with the temperature coefficient benefits of thin film panels could be a winning combination.
Stephen Smith of Solvida Energy Group adds that First Solar has "done a great job carving up BoS costs on their current designs, and it will be interesting to see how they leverage those talents with a new BoS product." Smith also sees a low-power and heavy glass-on-glass module presenting challenges relative to the standard silicon tracking designs and is interested in how First Solar will handle those challenges.