AstroPower: Decline of a solar photovoltaic star remains an untold tragedy?

Back in May, General Electric (NYSE:GE) announced the layoff of 85 workers and solar cell production would cease at its Glasgow, Delaware, plant. GE acquired the plant and assets of AstroPower from bankruptcy in March 2004 to form GE Energy, Solar Technologies. As always, delawareonline: The News Journal, in an article by Steven Church, provides the best coverage of events at GE Solar and the former AstroPower. While GE is expanding solar module production using cells from outside suppliers, does this event mark the end of the both recycled wafer and APex™ Silicon-Film™ solar cell technologies developed by solar industry pioneer AstroPower? GE's Global Research Centers will likely continue solar research programs directed towards high performance and low cost photovoltaic cells in the pursuit of ECOMAGINATION^SM. However, there are no posts regarding photovoltaics at the GE Global Research Blog, From Edison's Desk.

As the worldwide solar photovoltaic industry expands production at a rapid pace and confronts silicon shortages and solar module demand growth fluctuations, the rapid decline of industry high flier AstroPower may provide some sobering lessons.

First, let’s review a chronicle of events leading to the bankruptcy of AstroPower and the aftermath.

July 31, 2001 - AstroPower, Inc. today announced that it has signed an agreement to acquire Aplicaciones Tecnicas de la Energia, S.A., commonly known as Atersa, a privately held company based in Valencia, Spain.

August 1, 2002 - AstroPower, Inc. Reports Second Quarter Results

AstroPower stunned analysts and investors with their second quarter 2002 results. Revenue was $20.4 million representing (1%) one percent sequential growth and $4.9 million below analyst estimates, sparking nine class action lawsuits. The Stanford Law School Securities Class Action Clearinghouse has the AstroPower, Inc. Company and Case Information. The lawsuits allege that AstroPower misrepresented its financial and business status between Feb 22, 2002, and August 1, 2002. In addition to AstroPower, Inc., CEO Allen Barnett, Ph.D., and CFO Thomas Stiner are named as individual defendants.

April 1, 2003 - AstroPower delays filing of 2002 fourth quarter and annual results to the SEC.

April 21, 2003 - AstroPower, Inc. announced today that it received a NASDAQ Staff Determination letter on April 17, 2003 indicating that AstroPower does not comply with the requirements for continued listing set forth in Marketplace Rule 4310 (c) (14) as a result of its failure to timely file its Annual Report on Form 10-K for the year ended December 31, 2002 with the Securities and Exchange Commission. Accordingly, shares of AstroPower's common stock are subject to delisting from the NASDAQ National Market. As a result, the trading symbol for AstroPower common stock will be changed from APWR to APWRE at the opening of business on April 22, 2003.

May 27, 2003 - AstroPower's CEO and CFO resign
The Board of Directors then accepted the resignations of Allen Barnett, Ph.D., the Company’s Chief Executive Officer, and of Thomas Stiner, the Company’s Chief Financial Officer, from their respective executive positions with AstroPower and removed two other management employees.

July 24, 2003 - AstroPower, Inc. Announces NASDAQ Delisting

July 25, 2003 - AstroPower, Inc. Engages Bridge Associates to Provide Interim Management and Operational and Financial Consulting Services

February 1, 2004 - AstroPower, Inc. (OTC: APWR.PK) announced today that it has reached an agreement to sell certain of its U.S. business assets to GE Energy. To facilitate the sale, among other reasons, AstroPower has filed a petition for reorganization under Chapter 11 of the Bankruptcy Code in United States Bankruptcy Court in Delaware.

It is interesting to note that Evergreen Solar (NASDAQ:ESLR), Files Objections With AstroPower Bankruptcy Court, was also interested in acquiring the assets of AstroPower and felt the sale had not been open and fair.

March 12, 2004 - AstroPower, Inc. (OTC: APWRQ.PK) announced today the US Bankruptcy Court presiding over AstroPower’s Chapter 11 proceeding approved the sale of most of AstroPower Inc.’s US business assets to General Electric Company’s designee Heritage Power LLC. The sale price was $15 million cash plus the assumption of certain liabilities. The sale is expected to close by the end of March.

June 16, 2004 - Registrant filed a Motion with the US Bankruptcy Court in the District of Delaware announcing that it has reached an agreement to sell 100% of the equity of Aplicaciones Techicas de la Encergia, S.L.(Atersa), its Spanish subsidiary, to Elecnor, S.A., (Elecnor) a Spanish concern.

July 14, 2004 - AstroPower, Inc. announced that the US Bankruptcy Court presiding over AstroPower’s Chapter 11 proceeding approved AstroPower’s participation in the disposition by an AstroPower subsidiary of 100% of the share capital of Aplicaciones Tecnicas de la Encergia, S.L.(Atersa) its Spanish operations to Elecnor, S.A.., (Elecnor) a Spanish Corporation on July 12, 2004. The sale closed on July 14, 2004 in Madrid Spain. The sale price was 3.0 million euros. This transaction completes the sale of substantially all of the assets of AstroPower Inc. and its nondebtor subsidiaries.

December 10, 2004 - Bankruptcy or Receivership Final Plan approved.

In a final twist to the AstroPower saga, AstroPower Liquidating Trust, operated by Bridge Associates, has sued KPMG for mismanaging company audits.

So what went wrong at AstroPower? This question may remain unanswered even after all the lawsuits proceed through the courts.

Bridge Associates, the turnaround and crisis management firm brought in to salvage AstroPower, has an informative case summary regarding the still current “engagement”. Bridge Associates summarizes the AstroPower challenge as follows. “The Company discovered a substantial financial reporting misstatement which led to the departure of high level executives. The Company also faced a severe liquidity crisis caused by historical operating losses and significant research and development spending.”

Per Bridge Associates, there are apparently two dimensions to AstroPower’s demise.

1) Allegedly, the company was inflating revenues and profits in the 2002 class period and may even have been incurring losses. In the past, AstroPower had research contract revenue recognition issues. See U.S. sues AstroPower for $7.9 mln in contract dispute.

2) Most likely, although this is pure speculation, Silicon Film production was troubled and wasting company cash and material resources. GE Solar ceasing solar cell production is perhaps the best confirmation that Silicon Film continues to have unidentified manufacturing issues.

While the broad stokes of the AstroPower story seem clear, the details of misstatements, mismanagement, losses, and production issues have still not emerged.

For an uncensored view point, AstroPower fufills (fulfills ed.) legacy is an unflattering, unsubstantiated, and anonymous blog entry by a supposed, former AstroPower employee.

APWR: an electrifying experience provides an individual investor’s post mortem of his failed AstroPower investment and how to recognize the signs of trouble.

Dr. Barnett’s research and professional reputation have not been diminished by the AstroPower saga. In November 2005, Dr. Barnett, as principal investigator and research professor, was chosen to lead a broad consortium of 15 universities, corporations and laboratories, spearheaded by the University of Delaware (UDEL), to develop Very High Efficiency Solar Cells (VHESC) with 50% efficiency within the next 50 months. The Defense Advanced Research Projects Agency (DARPA) is funding the VHESC effort with up to $33.6 million of a potential $53 million research budget.

In Silicon Valley, the highest flying companies tend to stumble around the time they move into a new headquarters "palace". AstroPower’s troubles may have started before February 2002, when they moved into their new 158,000 square foot facility with America’s Largest Installed Solar Power System. But the former AstroPower headquarters building in Glasgow, Delaware, may indeed be cursed. Since the Christina School District acquired the building with plans to convert it into a middle school, a financial crisis at the district, prompted by a severe budget shortfall, forced the plan to be delayed.

If you have first hand insights into the decline of AstroPower, please submit your anonymous comments or email me - confidential sources will not be identified.

(Full disclosure: I owned shares of APWRE stock when it was delisted from the NASDAQ.)

SolFocus vs. Concentrix Solar: Battle of the Solar Concentrator PhotoVoltaic (CPV) start-ups

Outside of silicon shortages and Thin film solar technologies, Concentrator PhotoVoltaics (CPV) is the “hottest” topic in solar electricity and has attracted significant VC investments in 2006. SolFocus and Concentrix Solar are two of the highest profile and best funded Concentrator PhotoVoltaic (CPV) start-up companies. While both companies utilize high efficiency, Multijunction III-V space solar cells, compound semiconductors including gallium arsenide (GaAs) on germanium (Ge) substrates, their basic technologies differ as well as their research partners, solar cell partners, and management lineage.

The SolFocus Gen1 (first generation) mini-dish approach has a primary mirror collect and focus direct sunlight onto a secondary mirror located on the axis at (or near?) the focus of the primary mirror as shown below. The secondary mirror, mounted to the front window, reflects the concentrated sunlight onto a non-imaging optic located directly over the solar cell. In a honeycomb arrangement, a number of mini-dishes can be packaged into a solar module with the same rough form factor as a mainstream silicon solar module, although the panel thickness is greater, driven by the focal length of the primary mirror. Professors Jeffrey Gordon and Daniel Feuermann of the Ben-Gurion University of the Negev, Beer-Sheva, Israel, developed the mini-dish approach adopted by SolFocus.

SolFocus Gen1 Mini-dish	SolFocus Gen1 solar module prototype

Before the SolFocus Gen1, most mirror focusing systems mounted the solar cell(s) in a receiver at the focus of the primary mirror similar to a satellite dish. See Solar Systems Pty for successful, large scale (35kWp) implementations of this technology. There are two key drawbacks to the mirror-receiver CPV approach. The solar cells are mounted in direct sunlight making them more difficult to cool, and the receiver assembly and support arms cast a shadow on the mirror, decreasing power output critical for a mini-dish application. The SolFocus Gen 1 design is a clever solution to both of these key issues.

In Concentrix’s FLATCON® (Fresnel Lens All-glass Tandem cell CONcentrator) technology, a Fresnel lense concentrates direct sunlight equivalent to 500 suns through a 2mm-diameter focal point onto the solar cell. The Fresnel lenses are fabricated in a silicone film on the inside of the module top glass plate, and the entire module housing is also made of glass to avoid thermal mismatch with the different materials. The solar cells are mounted and bonded to a copper substrate heat sink which is apparently glued to the inside back of the module. FLATCON modules have 48 Fresnel lenses dimensioned 4x4 cm square and an overall height of 76mm. Fraunhofer Institute for Solar Energy Systems (ISE), Freiburg, Germany, teamed with the Ioffe Physico-Technical Institute, St. Petersburg, Russian Federation, in the early 1990’s to develop this straight forward, imaging optics based, FLATCON technology.

FLATCON CPV cell	FLATCON solar module

Fresnel lenses have been a mainstay of CPV products using silicon solar cells and, in recent years, Multijunction III-V space solar cells. For example, Amonix has been a pioneer in using high efficiency silicon solar cells in 25kWp and greater scale CPV since 1989. sol3g is a company commercializing the GS200 module, a non-imaging, Fresnel CPV system, well suited for commercial and perhaps residential rooftop applications because of a unique decentralised 2-axis solar tracking technology.

Surprisingly, it appears heat sinking is not a critical concern in either the SolFocus or Concentrix Solar module designs. Neither design requires huge heat sinks to cool the solar cells for optimal operation. Some information from Mr. Conley, CEO of SolFocus, indicates the Multijunction solar cells do not begin to approach their maximum junction temperature in typical operation with the Gen1 module design. And a small, thin copper substrate, mounted on a glass insulator, is sufficient to cool the Multijunction solar cells in the Concentrix Solar module design.

SolFocus has tipped Spectrolab as their partner/supplier for Multijunction III-V solar cells, although it is not clear which efficiency Triple Junction solar cell has been selected. Although mechanical package dimensions are not included in the online data sheets, these cells are probably available in compatible packages, so efficiency requirements and yield/price tradeoff decisions can be market driven. Spectrolab is the world leader and record holder in delivering the highest efficiency Multijunction III-V solar cells achieving 39% efficiency at 236 suns concentration. A recent Spectrolab presentation at the Advanced Solar Energy Solutions Workshop has detailed information about their products and view of CPV solar market. Last November, a SolFocus/H2Go presentation pegs Spectrolab capacity at 200MWp per year, presumably under concentration.

Concentrix Solar has been tight lipped about their Multijunction III-V solar cells partnership and sourcing plans. My recent request for clarity on this issue was politely answered by the Concentrix PR folks who said, “Concentrix Solar has no announced suppliers for the solar cells. Concerning your last questions I am very sorry but it is part of our policy that we do not make statements about partners and our integration strategy.” Fraunhofer ISE (Concentrix Solar is an ISE spin-off company) has been very active in researching and developing Multijunction III-V solar cells with long time commercial partner, RWE Space Solar Power GmbH (RWE-SSP), and this research has been included in numerous papers about the FLATCON technology. Here is a presentation, regarding Multi-junction Solar Cells in Europe research and RWE-SSP capacity, given at the November 2005 EU JRC-Ispra hosted joint workshop. RWE-SSP has capacity for 270,000 wafers (100mm) per year or 130MWp with 35% efficiency @ 500 suns and 95% production yield.

Both SolFocus and Concentrix Solar CPV solutions require sun tracking systems to acquire and maintain their focus on direct sunlight for optimal performance. Tracking systems add an extra level of complexity, cost, and their mechanical systems require maintenance. On the module specification front, SolFocus claims their Gen1 module has a “wide” acceptance angle of +/-1° trumping Concentrix Solar’s 0.6° acceptance angle. SolFocus’ larger acceptance angle implies their tracking systems can be less accurate and less expensive than Concentrix Solar.

On the cost front, SolFocus has aggressive plans to reduce the cost of their Gen1 technology from $8 per Watt in prototype volumes to $2.00 per Watt in 2007 mass production and as low as $0.55 per Watt in GWp scale production. Furthermore, SolFocus believes their Gen2 technology (to be discussed in a follow up post) can drive this cost to as low as $0.35 per Watt at GWp scale production. Concentrix Solar has outlined conservative plans to achieve a module cost of €1.23 per Watt at 20MWp production levels and fully installed costs, including the inverter, tracker hardware, and installation, of €2.35 per Watt. Per Solarbuzz, the August 2006 thin film or crystalline silicon module price per Watt varies between $4.00 and $4.15.

Both SolFocus and Concentrix Solar are targeting large solar electric installations of commercial, industrial, and power station scale. While SolFocus is optimistic about the application of their products outside the sunlight rich southwestern United States and similar sun climates depending on their price performance, Concentrix Solar believes their FLATCON modules will only be competitive in locations such as southern Europe, North Africa, or the American southwest.

SolFocus was founded in November 2005 by Gary D. Conley and Steve Horne to commercialize concentrator photovoltaic technologies (CPV) they developed at H2Go. “H2Go began in 1999 as an enabler for the hydrogen economy.” SolFocus has received $32 million in VC funding (see SiliconBeat for The VC frenzy over solar company SolFocus; VCs shower it with $32M and The VC bidding wars, and how SolFocus more than doubled its money). Gary Conley, who founded H2Go, is a serial Silicon Valley entrepreneur and the former CEO of EPRO and GuideTech. Mr. Conley is also a compulsive emailer. SolFocus plans volume production and deployments in 2007.

Concentrix Solar is a spin-off of Fraunhofer ISE and was founded in February 2005, and Dr. Hansjörg Lerchenmüller, who launched FLATCON Technology at ISE, is the founder and CEO. Good Energies, a successful investor in the solar photovoltaics industry with companies such as Q-Cells and the REC Group, has financed an undisclosed amount of first round venture capital for Concentrix Solar. Concentrix Solar has already begun delivering demonstration modules to strategic partners and plans to have a 1MWp pilot production line in place by the end of 2006.

Both SolFocus and Concentrix Solar will face traditional mono and polycrystalline silicon and thin film solar manufacturers as their prime competition, not, in my opinion, each other. Price per Watt is the key price to performance metric that will determine their competitiveness with traditional silicon and thin film solar manufacturers. In addition, I believe both CPV firms will compete for the supply of high efficiency, Multijunction III-V solar cells with other CPV technology companies. For example, the Australian firm, Solar Systems Pty, signed a multimillion dollar agreement with Spectrolab on August 14, 2006, for the initial supply of 500,000 cells (more than 11MW at Solar Systems CPV efficiencies). One reason SolFocus has received strong VC funding is to secure long term contracts with Spectrolab for Multijunction III-V solar cells. I am also concerned that both SolFocus and Concentrix Solar are single sourced for Multijunction III-V solar cells with Spectrolab and RWE-SSP respectively. In an ideal world, each company would second source their solar cells with Spectrolab, RWE-SSP, Emcore (NASDAQ:EMKR), and even Sharp Space Solar (if possible) to ensure supply and best competitive efficiency. At the moment, SolFocus has a worldwide competitive advantage by partnering with Spectrolab. In a similar vein, I am concerned about Concentrix Solar maintaining an exclusive arrangement with RWE-SSP and Fraunhofer ISE because their solar cells are third in efficiency worldwide, and RWE-SSP is “in play” as a company. RWE-SSP was acquired in May 2006 along with RWE Solutions from the RWE Group by Advent International, an equity buyout firm. A clever photovoltaic firm would make a tender offer to acquire RWE-SSP from Advent International.

In terms of competition, Sharp and Emcore are successful producers of their own Multijunction III-V space solar cells, and both have plans to commercialize their own CPV solutions. As the world leader in crystalline silicon photovoltaics, Sharp will be a formidable competitor to companies in the CPV space. Even more important, a Sharp entry into CPV will validate the market opportunity and threat to traditional silicon solutions by CPV technologies. In July 2006, Emcore announced a partnership with NREL to develop their own CPV Power Systems.

While standardization efforts for CPV applications are underway by governmental and industry organizations, CPV manufacturers such as SolFocus and Concentrix Solar need to cooperate with the CPV industry on CPV Balance of System components such as trackers and inverters. Although CPV technologies vary significantly from company to company, cooperation on module form factors, tracker techniques, and mounting methods can lower the costs for all CPV companies.

One other point regarding compound Multijunction III-V solar cells needs attention. Gallium arsenide materials are considered to be highly toxic and carcinogenic. I suggest both SolFocus and Concentrix Solar proactively setup pre-funded take back programs, similar to the model developed by First Solar, for their solar modules with independent third parties. Solar electricity is meant to be green and beneficial to the environment; pre-funded take back programs ensure this goal.

GP Note: I expect this is the first in a series of posts regarding SolFocus, Concentrix Solar, and other CPV technologies and firms.

NJCEP Greater than 10 kWp Solar Rebate Application Queue for Private Sector Installations - Market Analysis

The following is an analysis of the NJ Solar Rebate Application Queue for the Private Sector with system sizes greater than 10 kW (10,001 Watts and up).

This queue includes “complete” applications received by the Office of Clean Energy and awaiting rebate commitment approval in the NJCEP (New Jersey’s Clean Energy Program, http://www.njcep.com/ ) Customer On-site Renewable Energy (CORE) Program, and the queue was last updated on May 3, 2006. I tabulated the seven (7) pages of solar rebate applications in the CORE Queue by contractor, rebate amount, system size in DC kWp, and total installations.

There are a total of 306 solar rebate applications in the queue: 292 under CEP Approval Review, 1 Cancelled, and 13 retired because of miscoding or reduced system size. Analyzing the 292 active applications, the total application Rebate Amounts under review are about $111.2 million for 32030 kWp (~32 MW) of system capacity.

Click chart to enlarge

In the chart above, the distribution of System Size versus Rebate $ (dollars) per Watt for the applications can be viewed.

Since system sizes range from just over 10 kWp to 701 kWp, a simple system size average per installation is a useless statistic. Typical of residential and small business solar electric systems, 136 of the applications are between 10 kWp and 20 kWp in size. In fact, systems less than 45 kWp in size are 184 or 62.1% of the rebate applications but only 3227 kWp or 10.1% of the total system capacity. There are 225 applications for systems less than 131 kWp representing 20.1% of the total system capacity, while there are 33 systems sized 400 kWp or greater claiming 56.3% of total system capacity. Large solar electric systems dominate both rebate amount dollars and system capacity in the greater than 10 kW Private Sector Queue.

Eyeballing the chart, rebate applications are clustered from about $4.00 to $5.29 per Watt for systems below 50 kWp in size. I would suspect these high rebate levels are encouraging a spill over effect from less than 10 kWp systems. The new rebate schedule, effective March 16, 2006, should help to correct this effect. Systems less than 10 kWp in size will receive $4.35 per Watt rebates, while systems greater than 10kWp to 40 kWp will receive $3.20 per Watt rebates, a 24% difference in rebate per Watt. For systems above 50kWp in size, rebate applications range between $3.00 and $4.00 per Watt with a few exceptions, tending to be lower as the system size increases.
(Note: A data point with a $17.91 per Watt rebate for a 15.6 kWp system was discarded.)

The following are the top 10 contractor/installers with the highest dollar backlog of solar rebate applications under CEP Approval Review. For greater than 10 kWp system sizes, I have ranked these contractors by Rebate Amount dollars and cumulative system size; this is a better measure than the total installations ranking used for less than 10kWp system sizes.

Total Installs	Contractor	Total Rebate Amounts under CEP Approval Review	Total kWp
10	Powerlight Corporation	$15,169,801.00	4577.1
9	PPL Energy Services Holdings,LLC	$11,849,500.00	3600.0
33	NJ Solar Power, LLC	$10,532,183.20	2992.3
14	New Vision Technologies	$10,098,712.80	2857.3
4	Dome-Tech Solar, LLC	$7,046,524.00	2142.7
9	WorldWater Corp.	$6,377,593.60	1848.9
6	e2ECTA, Inc.	$3,988,168.00	1121.7
4	Northern Power Systems	$3,462,803.20	1013.4
3	Solar Integrated Technologies	$2,926,758.40	900.2
3	Solara Energy Inc	$2,692,264.80	721.5

While 59 contractors have rebate applications in the queue, the top 17 contractors applied for 80.8% of the Rebate Amount dollars under CEP Approval Review and 82.3% of the system capacity in kWp. The 50th through 59th ranked contractors had only one (1) rebate application in the queue for a system sized between 12 kWp and 20 kWp.

The Greater than 10 kW CORE Queue is also overdue for an update by the Office of Clean Energy. I would expect to see one “soon”. Given the large dollar backlog of $111.2 million in rebate applications relative to the CORE Program budget, I am pessimistic about seeing a large percentage of the application backlog being approved in the next update. I am curious to monitor how the Office of Clean Energy processes the solar rebate application backlog for greater than 10 kWp solar electric systems. Will the Office of Clean Energy approve a few large projects (greater than 130 kWp), many small projects (less than 45 kWp), and/or use transparent and objective criteria for solar rebate application approval?

Market Analysis of NJCEP Solar Rebate Application Queue for Private Sector Installations less than 10 kWp

In February 2006, the New Jersey Board of Public Utilities, (NJ BPU) directed the Office of Clean Energy to implement changes to the Customer On-site Renewable Energy (CORE) Program in order to prevent over commitment to projects versus the $273 million four-year funding level for 2005-2008, plus an additional $86.6 million in carryover commitments from 2004. As a result, all private sector CORE rebate applications are now held in a queue until the cancellation or expiration of existing commitments or as additional funds are released into the CORE Program budget.

The following is an analysis of the NJ Solar Rebate Application Queue for the Private Sector with system sizes less than or equal to 10 kW (0 to 10,000 Watts). While it is unclear what exact time period this NJCEP (New Jersey’s Clean Energy Program, http://www.njcep.com/ ) CORE Rebate Queue documents, the queue was last updated May 11, 2006. I tabulated the seventeen (17) pages of solar rebate applications in the CORE Queue by contractor, rebate amount, and system size in DC kWp.

There are a total of 782 solar rebate applications in the queue: 348 Approved, 427 under CEP Approval Review, and 7 Cancelled. Eliminating cancelled rebates, the total of Rebate Amounts is about $27.26 million for 5452 kWp of system capacity. The average system size per install is 7.0kWp, and the blended average rebate is a bit over $5.00 per Watt.

Almost all of the 348 approved rebate applications are for $5.10 per watt; about nine (9) are for $5.30 per watt, and eight (8) are for $4.35 per watt or less. The $5.10 per watt Approved rebates must have been filed before February 1, 2006, while the $4.35 per watt or less Approved rebates were probably filed after March 16, 2006.

A clear majority of the 427 solar rebate applications under CEP Approval Review are for $4.95 per watt. Although the data is a bit “sloppy” (perhaps there are some errors?), about 43 of the CEP Approval Review rebates are for $5.10 to $5.30 per Watt or higher, and 31 are for $4.35 per watt or less.

A total of 14 self installs are included in the queue, and these self installs receive rebates reduced by 15% versus third party contractor installations, accounting for some of the lower dollar per watt rebates.

The following top 11 contractor/installers have Approved and a backlog of CEP Approval Review solar rebate applications totaling more than $1 million. Anywhere from 39.4% to 60.3% of these top 11 contractor’s rebate applications were under CEP Approval Review except for Ecological Systems with a high of 88.9%.

Total Installs	Contractor	Total Rebate Amounts	Total kWp
92	Trinity Heating and Air	$3,657,957.95	735.2
63	The Solar Center, Inc.	$1,877,496.15	382.4
48	NJ Solar Power, LLC	$1,952,015.05	388.3
45	1st Light Energy, Inc.	$1,546,908.50	305.5
42	Energy Enterprises	$1,557,779.20	311.2
33	Absolutely Energized, LLC	$1,100,236.25	219.2
33	Renewable Energy Concepts, Inc.	$1,066,261.80	211.6
30	Advanced Solar Products, Inc.	$1,172,639.90	233.1
30	GeoGenix, LLC	$1,246,801.00	245.7
29	Sun Burn Solar	$1,003,584.00	199.2
27	Ecological Systems	$1,063,743.00	214.2

While 64 contractors have rebate applications in the queue, the top 18 contractors account for almost 80% of the approved or pending installations, capturing just over 81% of the system capacity in kWp and Total Rebate Amount dollars. The 42nd through 64th ranked contractors had only one (1) rebate application in the queue.

The CORE Queue should be updated “soon” per the Office of Clean Energy and as frequently as resources permit. I would expect to see an update at least every quarter. It will be interesting to track the rebate backlog of CEP Approval Review solar rebate applications and new applications to judge the health of the New Jersey solar photovoltaic market in the second quarter of 2006.

Secretive solar start-up, Solarvalue AG, reveals solar grade silicon production plans through joint venture bid for TDR-Metalurgija in Ruse, Slovenia

Back in March 2006, Solarvalue AG (http://www.solarvalue.com), the next level company based in Berlin, Germany, teamed with W&P Profil Maribor to bid for a controlling 90.78% stake in TDR – Metalurgija, a producer of calcium carbide and ferro-alloys, owned by Holding Slovenske elektrarne (HSE), Slovenia’s largest electric power provider for a undisclosed amount. The tender offer is under review by HSE, and Solarvalue expects bid approval is possible as early as September.

Solarvalue AG was established in June 2005 and has raised approximately €15 million in share capital to date. Dr. Karoly Horvath is the founder of Solarvalue AG and controls about 71% of the shares through SV Holding GmbH. Falken Fonds is the second largest shareholder with about 16% of the shares, and the remaining shares are held by insiders.

Solarvalue AG has formed a subsidiary, Solarvalue Production d.d., in Ruše, Slovenia, to produce Solar Grade Silicon (SGS) from high quality metallurgical grade silicon leveraging an existing arc furnace at the TDR d.d. facility. Solarvalue has developed a three process approach to produce metallurgical silicon from low impurity raw materials and refine it into SGS. The Solarvalue SGS process has been validated by independent silicon consultant, Ted Ciszek, (http://www.siliconsultant.com), and Solarvalue has produced preproduction SGS samples at the facility. SGS production is scheduled to start at the end of 2006. Initial production volume targets or ramped capacity potential have not been announced. Solarvalue and their undisclosed strategic partners expect to invest about €30 million to get SGS into full production. John Mott, a composite materials expert and entrepreneur, is slated to become Chief Operating Officer (COO) of Solarvalue Production d.d. to realize SGS production.

Solarvalue AG has expanded their business strategy since a company presentation at the Fall 2005 German Equity Forum in Frankfurt. Solarvalue is now integrating the entire solar value chain, bidding for TDR d.d. to produce solar grade silicon, and acquiring Sunovation for polycarbonate modules and sales channels. Leveraging their solar grade silicon, Solarvalue believes they can exploit the solar industry’s polysilicon shortage and plans to develop international strategic partnerships with solar wafer, cell, and module manufacturers with idle production capacity. Solarvalue will market and sell their own branded solar modules to customers worldwide. Solarvalue co-founder Claudia Boehringer has remained as CEO to drive the growth and partner integration strategy, and Stefan Powels is Chairman of the Solarvalue AG Supervisory Board. Solarvalue AG has nominal plans for an IPO sometime in 2007 depending on the production ramp of solar grade silicon and market conditions.

Assuming the tender offer is successful, Solarvalue has laid out aggressive plans to get solar grade silicon into production in three to four months. Solarvalue’s progress toward this aggressive goal can be judged by a number of objective milestones. I have based these milestones in part on the recent announcement by JFE Steel regarding their development and production of solar grade silicon from “metallic” silicon.

After they upgrade or augment the TDR d.d. facilities with refining furnaces, Solarvalue will need to develop a stable process and deliver sample production SGS material to solar wafer and cell partners for qualification. Solar cell manufacturers will expect the Solarvalue SGS material to deliver the same cell efficiency and reliability as their existing products. Once the SGS material is qualified, Solarvalue will need to ramp production in order to become a relevant silicon supplier. Mainstream solar wafer and cell production requires approximately 10 metric tons of silicon feedstock to produce 1MWp of solar cells. Although I do not have a clear understanding of the TDR d.d facility’s SGS production capacity potential, I would judge the success of Solarvalue’s production ramp by cumulative deliveries of the first 10 metric tons of SGS and then 100 metric tons. =If= Solarvalue can achieve all these milestones, by no means a certainty, they will need to implement an SGS production capacity expansion program for 500 to 2000 metric tons of annual production in order to drive a solar value chain for 200MWp of solar module production. The SGS capacity target is dependent on Solarvalue’s plans for integration: complete SGS integration or a blend of integration, take or pay contracts, and spot market silicon.

In my opinion, if the tender offer is accepted in September, Solarvalue will be lucky to complete the first milestone and deliver sample SGS material, in significant volumes, from a stable production process to solar wafer and cell manufacturers for qualification by the end of 2006.

Suntech Power buys way into Japanese solar market with MSK acquisition

As reported in the EE Times, Suntech Power (NYSE:STP) has reached agreement to acquire MSK Corporation, one of Japan’s largest PV (photovoltaic) module manufacturers and a leader in the BIPV (building integrated photovoltaic) space, in a two step cash and stock transaction valued at up to $300 million based on MSK achieving certain revenue performance targets by year end 2007.

In a strategic move to expand capacity and enter markets besides Germany, the United States, or southern Europe, Suntech has outflanked the competition outside of Japan and brought a new dynamic to the Japanese solar market.

Dr. Zhengrong Shi, Suntech's Chairman and CEO said, ''While Japan is the world's largest single market for PV modules, it is also one of the most difficult markets for foreign players to enter. We anticipate that this acquisition will give Suntech the advantage of MSK's nationwide sales and marketing platform in Japan, which we expect to leverage to grow our market share in this important market.''

A slight correction to Dr. Shi’s statement is in order. While Japan has the largest installed base of solar photovoltaic modules and is the world leader in solar cell and module production, the German market is the world’s largest in sales volume.

Suntech will face tough, domestic Japanese solar cell and module competition from world leader Sharp and top ten global producers Kyocera, Sanyo, and Mitsubishi. MSK is likely to operate as a somewhat autonomous subsidiary of Suntech, and MSK’s CEO, Dr. Tadao Kasahara is to remain in his current position for four years.

MSK has annual solar module production capacity of 200MWp. Since MSK does not produce their own solar cells, I would expect them to transition their manufacturing to Suntech solar cells. MSK’s amorphous solar thin film and module production technologies will expand and complement Suntech’s technology, intellectual property, and product mix. Suntech will want to exploit MSK’s BIPV products in the Chinese market and perhaps build new module factories in China or other significant markets.

Competitors will be eager to see if this Sino-Japanese linkup is a happy and synergistic one. I believe this landmark deal signals the “New Japan” is open for international business, including mergers and acquisitions. Is there a lesson here for US regulators concerned about Chinese acquisitions of American firms?

(Full disclosure: Mitsubishi UFJ Securities acted as a financial advisor to MSK on this transaction. I own shares of Mitsubishi UFJ, NYSE:MTU, stock.)

NJCEP CORE Program Inspection Report provides insight into the New Jersey Solar Installation Market

The CORE Inspection Report is an historical record of solar photovoltaic system inspections required by New Jersey’s Clean Energy Program (http://www.njcep.com/ ) through March 17, 2006. This report is tabulated by installer and includes valuable market information about total installations (projects), total system size installed in kWp, and a rough metric of installation quality with average inspections required before system approval.

The top 3 contractor/installers, Trinity Heating and Air, Sun Farm Ventures, and Energy Enterprises, completed almost 33% of the 1,147 solar system installations.

While 90 installers are included in the report, the top 15 installers completed almost 81% of the 1,147 solar system installations and 57% of the 15.2MWp of the installed system capacity. The system capacity figures for the top 15 installers were pulled down by 3 installers with 10 installations greater than 300kW in size. Also, the 51st through 90th ranked installers had only one (1) install to their credit.

As the report notes, this information is for historical reference and should be used with other information before selecting an installer.

If you sell or market solar photovoltaic products to contractors, here is your primary customer list for New Jersey.