In SunPower CEO Tom Werner's words: "Bottom line -- we posted record Q4 and 2015 results."
He said, "Fundamentals for solar have never been better," adding, "Our current forecast is for global solar deployment to approximately double over the coming five years with shipments exceeding 100 gigawatts by 2020."
Financial results and business highlights
The company lost $187 million in 2015 by GAAP methods but was $337 million in the black using non-GAAP methods. Werner stressed that EBITDA is a better metric with which to gauge the company's health.
- SunPower was awarded 30 megawatts in a recent French tender
- SunPower reached COD on 135-megawatt Quinto project and started construction of 100-megawatt project for NV Energy
- The company's pipeline now exceeds 14 gigawatts
- Baird writes that "management believes it is well positioned in the U.S. utility-scale market given its ~1.5-gigawatt pipeline acquired from Infigen."
- The first commercial project dropped down to 8point3 Energy Partners -- a 20-megawatt carport project for Kern County School District
- The CFO envisions an asset-backed security issuance in early 2017
- Q4 performance beat estimates, partially due to project timing, which also lowered 2016 EBITDA to the range of $450 million to $500 million
ITC
Werner remarked, "Here in the U.S., Congress passed a five-year extension of the Investment Tax Credit and extended bonus depreciation, which will enable further growth in tax equity financing. This legislation should provide a stable backdrop for accelerated long-term growth of the U.S. market. We were also pleased to see the California PUC approve a revised net metering proposal. This rule is very constructive with respect to further growth of the California DG market."
He said, "We expect that the five-year ITC extension should drive a significant acceleration of U.S. market growth through 2020. U.S. market demand is currently expected to be almost twice as large between 2017 and 2020, as in GTM Research's previous forecast."
P-Series, microinverters, standardization, capacity expansion
- SunPower said that it was seeing "extremely strong demand for our microinverters" and expects to ship up to 30 percent of its U.S. residential modules in 2016 with integrated microinverters
- SunPower will soon introduce a standardized system for the residential market
- SunPower's factories are reported to be running at "full utilization with record yields and cell output," with Fab 4 slated to produce approximately 175 megawatts in 2016
- The company's P-series product line is starting to ramp with expected volumes of 60 megawatts to 80 megawatts in 2016 and 2017 volumes in excess of 600 megawatts. The high-efficiency modules will be deployed in Asia-Pacific and Africa, while the very-high-efficiency IBC panels will be allocated to the U.S. and Japan. Of the P-series, Werner said, "We'll have a megawatt in the field in the next week."
Q1 and 2016 guidance
- For first quarter 2016: on a GAAP basis, the company expects revenue of $280 million to $330 million, gross margin of 11 percent to 12 percent and net loss of $115 million to $90 million.
- For fiscal year 2016: on a GAAP basis, the company expects revenue of $2.2 billion to $2.4 billion, gross margin of 17 percent to 19 percent, and net income of break-even to $50 million.
- Total megawatts to be deployed in Q1: 315 MW to 340 MW; total megawatts to be deployed in 2016: 1,700 MW to 2,000 MW
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5 key takeaways from SunPower's recent analyst day presentation
Solar will be a $200 billion market by 2020
"It's time to grow again," said the CEO. "Solar is [set to be] a $200 billion market by 2020" with 50 percent of the demand coming from Asia and China. He added, "The size of the opportunity going forward is a multitrillion[-dollar] opportunity. There aren't many markets with multitrillion[-dollar] opportunities."
Policy moving to market economics
Werner said that the policy environment over the last 20 years has been driven by incentives and feed-in tariffs "which create supercharged markets" that "come and go." What Werner sees going forward is a market orientation that is "more about access to the grid" and is increasingly subject to "market economics."
International business leverages Total relationship
With help from its parent company, Total (the largest company in France), SunPower looks to grow in South Africa and other parts of Africa, as well as in France and Turkey. The company is ramping its panel capacity to 4 gigawatts by 2019, including more than 2 gigawatts of low-cost panels for global markets. SunPower is pushing for a 20 percent to 30 percent reduction in installed system cost by 2018.
Cogenra acquisition provides lower-cost panel line
Those gigawatts of low-cost panels for global markets alluded to by Werner are going to be enabled by technology acquired from startup Cogenra. Funded by Khosla Ventures, Cogenra's original business plan targeted low-concentration PV technology. Cogenra's CEO and founder Gilad Almogy is a former senior VP at Applied Materials. Its COO, Ratson Morad, was a member of Solyndra's founding team and a former COO at Daystar.
The Cogenra process involves "singulating" conventional solar cells and bonding them in a shingle-like fashion. The process gets rid of the ribbon, improves reliability and reduces non-active area. The Cogenra team has a background in process tools and is now back to designing capital equipment to scale this technology. Werner said that its new lower-cost module line will produce panels with efficiencies of 17 percent to 19 percent while leveraging the "60 gigawatts of existing cell capacity." He called the Cogenra module technology "complementary" and "worthy of the SunPower brand."
SunPower still setting efficiency records
SunPower announced a new, soon-to-be-published solar cell record of 25.2 percent and an aperture-area panel efficiency of 22.8 percent, as measured by Fraunhofer ISE CalLab.