Small Cap Strategist is published by Crystal Equity Research an independent research resource on small capitalization stocks. Follow along as we discuss the most recent trends in the small-cap sector, investigate interesting companies and pan a few not-so-promising stocks.
the first quarter 2013 earnings conference call for crystal growth equipment
supplier GT Advanced Technologies (GTAT:Nasdaq), CEO Tom Gutierrez made the comment that the future of the solar
photovoltaic sector is dependent upon cost reduction.Strong climate incentives ensure demand, but
solar cell producers will not achieve profitability until production costs are brought
down.The comment sent me on a quest for
the cheapest photovoltaic technology.
seems so far PV suppliers have focused on product efficiencies. Better solar cells command higher unit prices
and therefore provide better coverage of fixed costs.U.S.-based solar cell producer First Solar, Inc.
recently announced its claim to the world record in solar conversion
efficiency.Its thin-film cadminum-telluride
(CdTe) photovoltaic module achieved a record 18.7% total efficiency in tests
confirmed by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL).First Solar beat its own 14.4% conversion efficiency
record set in early 2012 for the same thin-film cell type.
advance along with savvy materials sourcing and better manufacturing
throughput, helped achieve lower costs per unit.In 2012, First Solar reported total average
manufacturing costs were $0.73 per watt compared to $0.75 in 2011 and $0.87 in
2009.The problem is that price
competition (some of it allegedly unfair) has robbed First Solar and others
from turning lower unit cost reductions into higher profit margins.
economy has a history of turning to new technology to solve problems.Organic solar cells is not exactly a new
technology, but it could be an alternative to conventional inorganic
cells.An organic solar cell uses
conductive organic polymers or small organic molecules to absorb sun light generate
electricity by the photovoltaic effect.
the solar cell production processes involving crystalline substrates, organic
solar cell production is at ambient temperatures.This gives organic solar cells an immediate
cost advantage.Even though production
costs are quite low organic photovoltaic technology has not been taken
seriously in the past because it has failed to generate competitive power conversation
efficiencies.A couple of organic PV
producers have made some advances.
in the U.K. Eight19
is developing flexible ‘printed plastic’ solar cells based on organic
semiconductor materials.Eight19 relies
on already-proven ink printing and coating processing technologies and
equipment to produce its printed plastic solar cells. The company is targeting consumer and off-grid
applications where highly flexible and low-weight solar modules are
required.Recent advances have solar
conversion rates in the 8% to 10% range.Coupled with dramatically lower production costs and application
advantages, the leaders at Eight19 believe their planned product can be
is a private company which leaves minority investors on the outside with our
noses pressed against the window pane.The company also raised money through the sale of a division involved
with sales of an ‘off-the-grid’ solar product.That probably means Eight19 will not be visiting the capital markets and
engaging institutional or private equity investors either.
does not mean investors will not see or hear from Eight19.With most of the risk assumed by earlier
stage investors, I believe Eight19 could be a tempting acquisition target.Another solar cell company is a possibility
but a more like suitor could come from the building industry which is keenly
interested in finding novel, low-cost solar options.
post will discuss another promising 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. Eight19 has been included in the Solar Group of The Atomics Index sponsored by Crystal Equity Research.