Update: $50M Funding Round for SolFocus CPV

Investors are betting that 2011 could be the year for concentrating PV. GTM Research provides a forecast.

Eric Wesoff December 28, 2010

Eric Wesoff

Editor-at-Large
Greentech Media

Eric Wesoff is Editor-at-Large at Greentech Media. Prior to joining GTM, Eric Wesoff founded Sage Marketing Partners in 2000 to provide sales and marketing-consulting services to venture-capital firms and their portfolio companies in the alternative energy and telecommunications sectors. Mr. Wesoff has become a well-known, respected authority and speaker in these fields.

His expertise covers solar power, fuel cells, biofuels and advanced batteries. His strengths are in market research and analysis, business development and due diligence for investors. He frequently consults for energy startups and Silicon Valley's premier venture capitalists.

SolFocus, the Mountain View, CA-based concentrating photovoltaic (CPV) specialist, is soon to close on a $50 million-plus Round D of venture funding in the coming weeks. We covered this in November, but have a few more details now.

Here's the link to the SEC document that cites the SolFocus investment. Investors listed on the SEC document include NEA, NGEN and Apex. This brings the total VC funding for the company to more than $190 million.

$20 million of this still-open round comes from DSBJ, SolFocus' manufacturing partner in China.

SolFocus' competitors, such as Amonix, have also continued to receive cash infusions from venture firms, ostensibly to provide the kind of balance sheet that provides them the longevity to be considered bankable.

SolFocus has made some positive announcements of late, including the first commercial solar power plant in Saudi Arabia using CPV systems. The project, sited in the Bahra region, will deliver around 300 megawatt-hours of energy per year from 132 kilowatts of nameplate capacity. Vision Electro Mechanical Company, a subsidiary of Construction Products Holding Company (CPC), will install the SolFocus solar power systems, starting with this plant in CPC's Bahra industrial complex. Vision will install other solar power stations in Saudi Arabia, as well as in the research centers of King Abdullah University of Science and Technology (KAUST).

SolFocus has addressed the bankability issue with a warranty for its CPV systems of 25 years for power performance. If any product fails to meet the specifics of this warranty, a Munich Re policy will kick in.

A recent announcement from Southern California Edison also bodes well for CPV. SCE signed PPAs with Amonix for more than 25 megawatts of CPV on contract to be built by mid-2013. Concentrix, now owned by Soitec, has shown some signs of life and has partnered with Johnson Controls. Some folks believe early-stage Morgan Solar has a chance. Optical networking giant JDSU has entered the CPV semiconductor contest. There's also rooftop CPV from Soliant. Opel and Encore are also getting a bit of traction in CPV systems sales.

Nancy Hartsoch, VP at SolFocus, estimates that the amount of CPV shipped in 2010 will be 12 megawatts to 15 megawatts with an "installed base of about 8 megawatts." She suggests that 2011 will see 100 megawatts shipped, a substantial growth curve.

According to a soon-to-be-released CPV report from GTM Research, annual CPV installations will grow from 2 megawatts in 2009 to 750 megawatts in 2015. Those numbers suggest that the market will more than double every year for the next six years, growing much faster than the PV market as a whole. If these predictions prove accurate, 750 megawatts of CPV in 2015 would account for about 2.5 percent of the total solar PV market, meaning that CPV would remain a specialized solution suited for locations with poor water resources and high DNI.

This is an aggressive forecast and will require the cooperation of developers and banks in accepting the LCOE and reliability projections of the leaders in CPV.