Weekly Solar Notes: India’s Higher Solar Targets, SunPower’s European Downsizing, Trina’s Efficiency Record

The solar industry had an interesting week, with news of panel supply agreements, potentially higher installation targets in India and new cell efficiency records. The Guggenheim Solar ETF (NYSE:TAN), a fund that consists of a broad group of stocks in the solar industry, rose by about 6.5% through Thursday.

Yingli Supplies Panels To World’s Largest Floating PV Power Plant

Yingli Green Energy (NYSE:YGE) China’s largest solar company, will be supplying panels to the world’s largest floating solar power plant which is being constructed in Japan. The 7.5 MW plant will be built on an agricultural reservoir in the Saitama prefecture. ^[1] Floating PV plants have been put forward as a potential solution to Japan’s dearth of suitable land for utility scale solar projects. Around 73% of the country’s land is either mountainous or forest, and the country’s population density is also very high. Yingli has a significant exposure to the Japanese utility scale solar markets and expects its shipments to the country to grow 20% in 2015.

• We have a $3.50 price estimate for Yingli Green Energy, which translates to a market cap of about $650 million. Our price estimate is about 23% ahead of the current market price. We are projecting revenues of about $2.68 billion for FY 2014, with an adjusted net loss of around $0.49 per share.
• Yingli’s stock has gained roughly 5% through Thursday.

India Plans To Raise Its 2022 Solar  Installation Targets

India could increase its national solar target to 100 GW by 2022 from a previous target of 20 GW, according to the country’s Energy Minister. ^[2] India is an ideal market for solar power given its poor base load quality, relatively high energy costs and growing concerns about greenhouse gas emissions. In spite of the strong potential, the country’s solar installations have been slow to take off owing to regulatory issues and challenges related to land acquisition. However, the sector looks set for an overhaul, supported by initiatives undertaken by the country’s new federal government, which is led by a party known to be an advocate of solar power.

SunPower Downsizing Workforce In Europe

SunPower (NASDAQ:SPWR) has announced plans to lay off about 115 workers over the next year, with a bulk of the job cuts coming from its European operations. ^[3] SunPower’s performance in Europe has been quite inconsistent,  following the scale back of government incentives in some key markets in the region. During Q3 2014, the company’s shipments to the Europe, Middle East and Africa segment fell by around 38% sequentially, while gross margins fell to 9.7% from 16.5%. Of late, many large solar companies have been moving their focus away from Europe into higher growth markets such as Asia Pacific.

• Trefis has a $33 price estimate for SunPower, which translates to a market cap of around $4.4 billion. Our price estimate is about 14% ahead of the current market price. We estimate the company’s 2014 revenues at around $2.7 billion, with an adjusted EPS of about $1.31. This compares to a consensus of around $1.33 according to Reuters.
• SunPower stock gained close to 6% through Thursday.

Trina Solar’s Cell Efficiency Records

Trina Solar (NYSE:TSL), China’s largest profitable solar manufacturer, announced that it has developed solar cells that set world records for mono and multicrystalline solar conversion efficiency. One of the company’s p-type monocrystalline solar cells, which integrates technologies including back surface passivation and local back surface field, achieved  an efficiency of 21.4% while the multicrystalline p-type solar cell recorded an efficiency of 20.53%. Although the new technologies are not in production yet, the company says that they will be part of its future Honey Plus and Interdigitated Back Contact (IBC) products. Conversion efficiencies are one of the key metrics for solar panels. Higher efficiency panels convert more sunlight into electricity and have a smaller surface area for every watt of rated power output. From a manufacturing standpoint, higher efficiencies often translate to lower per-watt production costs.

• Trefis has a $14.50 price estimate for Trina Solar, which implies a market cap of around $1.20 billion. Our price estimate is about 38% ahead of the current market price. We are modelling revenues of about $2.56 billion for 2014, with an adjusted EPS of $0.83. This compares to a consensus estimate of $0.89 according to the Financial Times.
• Trina Solar stock rose by about 9% through Thursday.

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1. Yingli Green to supply world’s biggest floating PV plant, PVTech, November 2014 [↩]
2. India to boost national solar target to 100 GW by 2022 – reports, PVTech, November 2014 [↩]
3. SunPower to trim EU workforce amid disappointing results, Recharge News, November 2014 [↩]