SunPower sets sights beyond US

SunPower has primed the market for further international project announcements in 2014, piggybacking on its recent successes in places like South Africa and Chile, as the US utility-scale PV market looks set to shrink in the medium term.

SunPower, which yesterday confirmed a gross margin of 19.6% for the whole of 2013 on a net profit of $95.6m, has been a major beneficiary of the booming utility-scale market in the US, which has been driven by a handful of western states racing to meet their own renewables targets.

In recent months California-based SunPower achieved full commercial operation of its 250MWac California Valley Solar Ranch project, and brought on line the first 57MW block of the 579MWac Solar Star (formerly Antelope Valley) project it is building for MidAmerican Solar.

But with states like California on track to meet their mid-term targets, the US solar market is expected to shift towards rooftops and smaller ground-mount arrays, with a growing geographic spread.

The utility-scale US market may revive again a few years down the road as the economics of PV continue to improve, SunPower believes.

In setting out its expectations for 2014, SunPower heavily emphasised its growing strengths in the US rooftop market – where it is already a leader – and as a power-plant developer in emerging markets around the world, the latter position bolstered significantly by its association with French energy giant Total.

Total owns a majority stake in New York-listed SunPower.

SunPower competes directly with the likes of SolarCity in the US residential solar-leasing market, and says it has signed up some 20,500 customers to date. It recently announced a $220m financial package with Bank of America, freeing up the financial constraints its residential leasing business felt during 2013.

Beyond the US, SunPower won an 86MW project in South Africa’s most recent solar tender, and secured financing for a 70MW merchant plant in Chile.

“We expect further international project announcements this year,” says chief executive Tom Werner, noting there will be a “continued focus on the Middle East”.

In November SunPower acquired Greenbotics, a California-based maker of robots that clean dusty PV panels, further underscoring its ambitions for desert regions in regions like the Middle East and Latin America.

Japan has also been critical to SunPower’s turnaround, with the company now selling large amounts of modules into both the utility-scale segment and – thanks to a partnership with Toshiba – the residential rooftop market.

SunPower’s full-year 2013 profit follows a net loss of $352m in 2012.

The enormous turnaround in profitability came despite the company recording just a 3.7% increase in revenues, to $2.51bn, underscoring the success of the company’s cost-reduction efforts.

SunPower expects revenues of $2.45bn-$2.65bn in 2014 on module sales of 1.15GW-1.25GW – a more conservative set of estimates than analysts had been hoping for. As a result, shares in the company slid modestly in pre-market trading.

The company’s shares have nevertheless tripled over the past year, leaving it with a slightly higher market valuation than rival US PV giant First Solar.

Werner noted that energy storage will be a “particular area of focus” for SunPower in the years ahead. The company has initiated a number of pilot energy-storage programmes, he says, with more details to be revealed later this year.