Friday, September 23, 2011

Made in America

Suniva has been added to The Atomics Index in the Solar Group.  Based in Atlanta, the company produces monocrystalline silicon solar cells and module.  Suniva boasts an efficiency rate of 19% for its Artisun-branded solar cells and 16% efficiency for solar modules produces with the Artisun at the core. Suniva is elbowing its way into the growing pool of solar cell producers, making bold predictions of a market without subsidies.

The U.S. let Asian producers take over solar cell production.  Finding the country nearly shut out of the market, U.S. political and business leadership has thrown everything but the kitchen sink at solar cell producers.  The recent collapse of solar power solution provider Solyndra may be a consequence of the cold-then-hot policies of recent U.S. Congresses and Administrations.

It is not surprising then that Suniva attempts to distinguish itself from the rest of the pack as a “Made in America” product.  It also claims its cells have the world's lowest cost, highest conversion efficiency commercially available.  If the latter claim was true it would seem a world-focused marketing strategy would be the preferred choice – not one touting it has been produced in the U.S. where manufacturing costs are perceived to be sky-high.

Suniva is still a private company, but we have hopes that the rest of us minority investor-types might get a bite through a future initial public offering.  The company received backing early on from Warburg Pincus, Goldman Sachs Group and New Enterprise Associates, among others.  It is reasonable to expect this group to lobby for some sort of exit and an IPO seems the logical choice.

The company is highly dependent upon its founder, engineering genius Dr. Ajeet Rohagti.  A professor of engineering, Rohagti is recognized the world over for his contributions to the photovoltaic industry.  He serves as the company’s chief technical officer.  Suniva’s CEO John Baumstark hails from one of the venture capital investors, H.I.G Investments.  As is often the case in early stage operations, it takes a bit of time for an effective transition from leadership by a founder to a CEO with an entrepreneurial or even operations orientation.

While a public offering might be welcome, I can wait for the chairs in the boardroom to get broken in before I risk money on an early stage solar company.

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein. Suniva is included in Crystal Equity Research’s The Atomics Index in the Solar Group.

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