It's analyst day at solar manufacturer and project developer SunPower. We'll be tuning in throughout the morning -- but here are a few of today's announcements, along with the firm's guidance. (And here's the presentation.)
SunPower will be tripling its capacity over the next five years
CEO Tom Werner just announced that SunPower intends to triple its upstream solar manufacturing capacity over the next five years. This capacity expansion includes:
- The 350-megawatt Fab 4 solar cell factory that is on track to produce up to 100 megawatts next year, according to the CEO.
- 800 megawatts of new planned solar cell and module manufacturing capacity for Fab 5
- More than 1 gigawatt of new planned low-concentration PV capacity (C7 tracker)
Werner reminisced about building SunPower's first fab in an old NEC hard disk drive manufacturing facility in the Philippines that "had to be torn apart" a decade ago. He said the 108-megawatt site "seemed massive at the time," and he was concerned as to how to keep it filled to capacity.
Now, Werner notes, the company is going to effectively build 25 of those lines in the next five years. "We're going for it," he said.
Financial guidance for 2014 and 2015
- The solar firm expects Q4 2014 GAAP revenue of $1.12 billion to $1.17 billion and gross margin of 26 percent to 28 percent
- During the most recent earnings call, the company trimmed its fiscal year 2014 guidance, with GAAP revenue expectations of $2.535 billion to $2.585 billion, down from $2.55 billion to $2.70 billion, gross margin of 20 percent to 21 percent, down from gross margin of 20 percent to 22 percent.
- For fiscal year 2015, SunPower expects, on a GAAP basis, revenue of $2.4 billion to $2.6 billion and gross margin of 21 percent to 23 percent.
SunPower just acquired microinverter firm SolarBridge
As we reported earlier this week, SunPower acquired SolarBridge, an Austin, Texas-based VC-funded integrated microinverter startup. Factory-integrated microinverters combined with solar panels have the potential to lower overhead and labor costs. SolarBridge has a high-performance, premium-priced inverter that is a good match for the industry's highest-efficiency solar module from SunPower. The sale price was not disclosed, which is not usually an indication of a high-multiple VC exit.
SolarBridge raised a total of more than $105 million from strategic and tactical investors including SunPower, Battery Ventures, Texas Emerging Technology Fund, Constellation Technology Ventures (of Exelon subsidiary Constellation, a retail electricity provider), Shea Ventures, Rho Ventures and Prelude Ventures.
SunPower has had a longstanding investment and business partnership with SolarBridge. What's more, a number of SolarBridge executives, including its CEO, are former SunPower employees. Last year, SolarBridge appointed Bill Mulligan as president and CEO. Mulligan was SunPower VP of R&D from 1998 to 2010. In July, SolarBridge Technologies named Mark Sandoval, formerly an executive at SunPower, as executive VP of global strategy.
Massive growth and new products
CEO Tom Werner notes that no company in the "fragmented" solar industry has greater than 8 percent market share.
He said that because the solar market has been incentive-driven, SunPower has very deliberately not exposed itself to any one segment. He said that the company has "diversified very purposefully, not exposed itself to any one market, and has done this very much on purpose."
Werner introduced today's session by pointing out that solar was now a $120 billion industry and that "we've just scratched the surface of this opportunity." He suggested that it was one of the largest market opportunities in the history of markets.
He predicts that the PV market will increase tenfold by 2035 for a cumulative revenue of $5 trillion. "I've been doing this for eleven years, and I've realized we're just beginning. That's why we're tripling capacity over the next five years."
"In order to do this, you have to scale the entire value chain, including downstream," said the CEO, who emphasized that SunPower is able to differentiate and build brand because of its technological superiority.
He noted that SunPower had a 20-percent-efficient cell in 2004, a milestone other solar companies are proud to achieve today. He said, "We will introduce a 25-percent-efficient cell in our fifth fab, and we will maintain our technological advantage in solar photovoltaics." The CEO also said that SunPower would be adding increased functionality to its offerings, including AC modules, energy storage and energy management.
Werner pointed out that production of SunPower's low-concentration tracker product C7 is expanding, with a new fab and installations in Arizona and Nevada and JVs in China with gigawatt-scale pipelines.