Thin film solar vendor Solyndra (SOLY) was not exactly explicit in declaring their module price per watt in their recently filed S-1 (which we dissected in Part 1). In short, the company doesn't put the number in there. Trony Solar, which recently pulled its IPO, and others do.
Some simple math, which admitedly does not tell the full Solyndra story, yields some interesting numbers.
Solyndra's revenue in the nine months ending Oct 3 was $58.814 million and their cost of goods sold for the same period was $108.321 million for the total of 17.2 Megawatts of CIGS solar panels shipped in that period. Almost half of that revenue (49 per cent) came from three customers - USE Umwelt Sonne Energie, Carlisle Syntec and Alwitra.
That works out to:
- A sale price of $3.42 per Watt
- A cost of $6.29 per Watt
Note that in Solyndra's case, there is not an exact clear comparison with other flat panel modules - because what Solyndra considers a "module" includes some mounting equipment. Anup Jacob, a Solyndra investor at Virgin Green Fund, told us in August that the company's install costs come to around 50 cents a watt, lower than the $2 to $4 a watt install costs for other thin film companies. Arguably, the lower installations cost could drop Solyndra's cost per watt to anywhere from $4.79 to $2.79 ($6.29 minus $1.50 to $3.50 for the lower installation costs.) With a $3.42 sale price, that means Solyndra might be able to coax some profit from their billion dollar investment. Attention Wall Street: trying to figure this out with a straight face is why you pay high prices for hardworking, replaceable associates.
Compare this to First Solar. First Solar's average manufacturing cost per watt declined by $0.23 per watt, or 21.3%, from $1.08 in the three months ended September 27, 2008 to $0.85 in the three months ended September 26, 2009. Or compare it to a silicon solar vendor like Trony Solar. Trony Solar's average manufacturing cost was $1.15 per watt for the fiscal year ending June 30 this year, the company said in its SEC filing. From June to September, the company lowered the cost to $1.09 per watt. Solyndra must also compete head-on with the plunging price of flat plate panels from BP Solar, Suntech, Mitsubishi, etc. while lowering their cost almost an order of magnitude from about $6 per Watt to under $1 per Watt.
Solyndra has lost money every quarter and anticipates losing money for the foreseeable future.
As far as capex is concerned - Phase I and Phase II of Solyndra's Fab 2 will total approximately $1.38 billion and Solyndra expects Fab 2 to have an annualized production run rate of 500 MW - which means that Solyndra's capex is about $2.76 per Watt, rather high for this industry whether you're comparing to other CIGS vendors or other crystalline silicon vendors. Solyndra is currently closer to the high end of $3 per Watt for amorphous silicon as opposed to the $1.50 per Watt for c-Si, $1 per Watt for FSLR' CdTe, and Nanosolar's claim of $.33 per Watt.
SOLY (that's what my Aunt used to call my Uncle Sol) is going to have to win more DOE loan grants and more equity funding and use the money it intends to raise in their public offering to aggressively drive their cost per Watt down. The success of their IPO rests on their ability to convince institutional investors that they can accomplish that.