A New Powerhouse in Solar

By Toby Shute
October 6, 2009 | Comments (4)

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Back in 2007, Dow Chemical (NYSE: DOW) won a $20 million grant from the Department of Energy to research and develop building-integrated photovoltaics (BIPV) products. The fruits of that government-sponsored labor are Dow's Powerhouse Solar Shingle, which the company is bringing to market in partnership with solar-cell shop Global Solar Energy and homebuilders Lennar (NYSE: LEN) and Pulte Homes.

Other firms active in BIPV include Suntech Power (NYSE: STP), Energy Conversion Devices (Nasdaq: ENER), and Ascent Solar (Nasdaq: ASTI), which is a bit further behind Global Solar in the commercialization of thin-film copper-indium-gallium-diselenide (CIGS) solar cells on a flexible substrate. Compared to the headline-grabbing utility-scale projects of First Solar (Nasdaq: FSLR), BrightSource Energy, and others, BIPV hasn't given investors much to get fired up about lately.

Dow may aim to change that. The company projects $5 billion in revenue by 2015, and $10 billion to $11 billion by 2020. That's just for the Powerhouse shingle, ostensibly the first of more BIPV products to come. This is much more ambitious than DuPont's (NYSE: DD) target of $1 billion for its own solar-related revenue, and it would move the needle even for a company the size of Dow Chemical.

The key source of Dow's enthusiasm appears to be its claim that the shingle will be 30%-40% cheaper than current BIPV solutions, and 10%-15% below the per-watt installed cost of conventional rooftop panels. Of course, with the solar industry in such a fluid state, that latter comparison could shift dramatically, depending on relative technology advances, not to mention panel supply and demand imbalances.

We'll have to see how the trial installations go in 2010 before getting too excited -- or worried, for those investing in competitors like ECD -- about these new solar shingles.

Dow Chemical is rated a handsome four stars by the Motley Fool CAPS community. Want to see what members have to say? Step right this way.

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Fool contributor Toby Shute doesn't have a position in any company mentioned. Check out his CAPS profile or follow his articles using Twitter or RSS. The Motley Fool has a disclosure policy.

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  • Report this Comment On October 06, 2009, at 4:04 PM, mitch4518 wrote:

    To say that Ascent is "behind" Global Solar in commercializing CIGS is just plain dumb. Ascent Solar has the next generation CIGS technology, invented by the same people who started Global Solar. It's "behind" in the same way that someone who's studying for a doctorate still has a year to go, while someone who's dropped out of high school has finished their education.

  • Report this Comment On October 06, 2009, at 11:30 PM, ecdfan wrote:

    Are you saying you that those investing in ECD are not worried, even though the stock is back near 5-yr lows?

    ECD did have a solar shingle product, SHR-17, a few years back (appeared on the market in 1998). Unfortunately, it lost its UL certification, and the long-term degradation study by NREL demonstrated that it likely violates its 20-yr warranty (ECD is still suppressing the final results from the 10-yr study).

    http://ecdfan.blogspot.com/2009/07/power-output-warranty-par...

    Now ECD's partner SRS Energy (CertainTeed is an investor) is promoting a "new" solar tile (very similar to Dow's 2007 tile prototype) by engaging in a blatant marketing fraud funded by US taxpayer money:

    http://ecdfan.blogspot.com/2009/06/marketing-of-solar-tile.h...

    Regarding BIPV: According to Frost & Sullivan, ECD is a second-tier player in the European BIPV market, with less than 10% share (while 90% of the BIPV market there is crystalline, obviously). And, in the US, of course, the BIPV market does not exist (as there are no special BIPV rebates/tariffs) - it is all rooftop PV and ground-mounted PV.

    http://ecdfan.blogspot.com/2009/05/unisolar-second-tier-bipv...

    All these brave new CIGS entrants better be certain that their solar shingle products will last at least 10 years, or otherwise all they will get is billions in lawsuits (rather than in revenues). Dow Corning, anyone? And of course, cost of manufacturing is key - while CIGS efficiencies are almost 2x those of ECD's laminates, these new entrants have not proven yet that they could compete with First Solar's 90c per Watt or with crystalline, on efficiency-adjusted basis.

  • Report this Comment On October 07, 2009, at 2:06 PM, TMFSmashy wrote:

    ecdfan,

    Oh, there are plenty of reasons to be worried, as you've documented so thoroughly in your blog. A great resource, by the way.

    Your handle is ironic. Were you at one point an actual fan of the company?

    TS

  • Report this Comment On October 07, 2009, at 6:54 PM, ecdfan wrote:

    Toby: Well, ECD was always showing up on the Foolish screens for sustained shareholder value destruction (after all, the company has never generated positive free cash flows on an annual basis in its almost 50-yr history, and, regularly, like clockwork, diluted the shareholders through those exciting follow-on offerings). But I really became a fan sometime in March of 2008, when, under the new management, it became clear that 1) the very aggressive revenue recognition policy (revenue is recognized when the client is notified that the product is "ready"), and 2) the tiny but annoying discrepancies in the SEC filings were not flukes:

    http://ecdfan.blogspot.com/2009/05/is-ecd-cooking-books.html

    And I started my blog in May of 2009, when it became apparent that the company has set eyes on the US taxpayer dollars:

    http://ecdfan.blogspot.com/2009/05/unisolar-goes-to-washingt...

    and that it is sending free solar systems to politicians:

    http://ecdfan.blogspot.com/2009/07/money-for-nothing-and-pv-...

    and that SEC, in their infinite wisdom, had completed their review and had no further comments:

    http://ecdfan.blogspot.com/2009/05/interesting-sec-correspon...

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