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1. Flint Buys Back GM's Love With Tax Breaks for Volt Plant
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2. Solarfun, GT Solar Shares Slide on Pricing Expectations
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3. Mitsubishi to Quadruple Solar Cell Production by 2012
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4. Nanosolar Boosts Funds to Massive Half Billion Dollars
Flint Buys Back GM's Love With Tax Breaks for Volt Plant
Guest Column - Big Green
Pop quiz: Monday was a good day if you were (A) General Motors; (B) planning on buying the Chevy Volt; (C) an unemployed resident of Flint, Mich., or (D) all of the above? You know the answer. Yesterday, GM received millions in promised tax breaks to help build a new $359 million, 530,000-square-foot engine plant for the Chevy Volt, the most highly anticipated green car this side of the Tesla.
The plant will assemble the 1.4 liter turbo four-banger that will be used in the Volt as well as in Chevy's new Cruze compact. The new engine works will be built near Flint Engine South and Flint Truck plants and create 300 jobs. GM is to begin production in 2010, with Volt assembly set for GM's storied Hamtramck (Mich.) plant just 65 miles away. GM is also seeking additional tax breaks from the state of Michigan for Volt production, and Congress is considering tax incentives that would defray purchase costs of the Volt.
The news was welcomed, if not whole-heartedly, by Flint Councilman Jim Ananich: “A lot of people still feel…General Motors owes us more than just a couple hundred jobs,” he told the Detroit News. “I understand what people feel — I still sometimes have those feelings — but as competitive as the market is and the trouble General Motors is having, we have to help them with whatever we can do to keep them competitive.”
Flint used to be GM's go-to city back in the day. “Without Flint, GM would have to shut down,” or so the saying went, but by the mid ’90s, the city of Flint looked like a set for the next RoboCop sequel. Remember, Flint, Mich., was the city featured in Michael Moore's "Roger & Me." So, 300 jobs are a drop in the bucket compared to the tens of thousands that used be there, but at least it's a step in the right direction. Re-tooling idled plants that are scattered throughout the Midwest to manufacture greener cars like the Volt seems like an obvious idea; we’re glad to see GM’s at least building in the neighborhood.
GM will unveil the Volt at either the Los Angeles International Auto Show in November or the Detroit Auto Show in January.
Solarfun, GT Solar Shares Slide on Pricing Expectations
Kevin Kelleher - Big Green
The mood in the solar stock sector today might best be described as dark green. Shares in Qidong, China-based Solarfun posted financial earnings that were ahead of analyst expectations, but the shares dived as much as 11 percent percent on concern that prices for its photovoltaic cells and modules will decline as much as 10 percent next year.
That followed another earnings report Tuesday from Nasdaq newbie GT Solar, which saw revenue more than triple to $57 million in its most recent quarter. The report, its first following its high-profile but ultimately disappointing IPO last month, also showed GT swinging to a profit of $5.1 million, or 3 cents a share, vs. a year-ago loss of $5 million, or 4 cents a share.
Yet shares of Merrimack, N.H.-based GT, which makes equipment that solar-panel companies use in their facilities, fell more than 10 percent to change hands for as low as $12.61 on Wednesday morning — a 23.6 percent drop from its $16.50 offering price.
The renewed bearishness follows what last week had started to look like confidence returning to solar stocks. It seems past performance, however strong, isn’t outweighing lingering concerns about what lies ahead for solar companies.
Take Solarfun. In discussing its financial outlook, the company made statements that suggest silicon prices will remain high at least through the coming quarter, while average selling prices, or ASPs, for its own goods are poised to come down in 2009.
“Gross margins for the second half of 2008 are expected to improve from levels seen in the second quarter of 2008, although the Company expects that polysilicon and wafer pricing will continue to be high during the third quarter of 2008.” “For the Full Year 2009, management expects … ASP's to decline 5-10% from the expected full-year 2008.”
Nevertheless, Solarfun also said it expects its gross margins to improve next year as it manages the squeeze. That wasn’t enough. The negative sentiment about the solar market seems to have won the day.
Mitsubishi to Quadruple Solar Cell Production by 2012
Craig Rubens - Big Green
Even the big boys of solar need to keep ramping up production to meet global demand. Today, Mitsubishi Electric said it will invest 50 billion yen ($455 million) to quadruple its annual photovoltaic production capacity to 600 megawatts by 2012 from 150 megawatts today. The plan calls for the construction of a new fabrication building at its Nakatsugawa Works Iida factory in Nagano Prefecture. This new plan is 100 megawatts bigger and a year sooner than the goal Mitsubishi set in March when it announced an investment of 7 billion yen to expand solar cell production. Mitsubishi forecasts a global PV market size of 1,950 megawatts in 2009, growing to 4,430 megawatts by 2012.
Although solar incentives in certain markets are weakening, and are threatening to expire in the U.S, demand is expected to increase as the world switches to cleaner energy sources, especially if oil prices remain high. “I wouldn’t be surprised if the U.S. solar market passes Europe’s in a few years,” Aiji Suzuki, head of the Nakatsugawa Works facility, told Reuters.
And while oil prices might have slipped from their record highs earlier this summer, silicon prices are expected to slip too. Solar manufacturers are expecting silicon prices to fall drastically as a glut of new fabrication facilities come online in the next few years. New Energy Finance’s Silicon and Wafer Price Index estimates that solar silicon prices will fall 43 percent next year.
Nanosolar Boosts Funds to Massive Half Billion Dollars
Katie Fehrenbacher - Startups
Thin-film solar maker Nanosolar was already one of the more well-funded startups in cleantech with at least $150 million behind it. But this morning Nanosolar’s CEO Martin Roscheisen writes on the company blog that Nanosolar has raised $300 million in an oversubscribed equity financing round, which closed in March, that brings its total to just under half a billion dollars. That could make it one of the most well-funded startups. Period.
Roscheisen says the funding comes from power company AES, the Carlyle Group, French utility EDF and Energy Capital Partners, which made investments through Riverstone Holdings, and EDF Renewables; the funding occurred at the same time as AES and Riverstone formed AES Solar, and the funding was part of the business case for forming the joint venture, Roscheisen explains. A smaller part of the round came from Lone Pine Capital, the Skoll Foundation, Pierre Omidyar's fund, GLG Partners, Beck Energy, and Grazia Equity.
Roscheisen says the funding will go toward ramping up production of the 430 MW San Jose plant and the 620 MW Berlin factory. Nanosolar has been producing its thin-film solar product for utilities since December. But given we’ve seen a few U.S. utilities sign solar power contracts that included thin film solar — PG&E with OptiSolar and Southern California Edison with First Solar — we asked Roscheisen if Nanosolar has been bidding on solar power projects in the United States. Rocheisen tells us that yes, Nanosolar is involved in U.S. utility solar bids through the AES partnership.
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