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We're in the midst of earnings season in the solar industry, and that's shedding some more light on what happened in the fourth quarter and what to expect in 2014. What we know so far is that demand is robust and everyone along the solar supply chain is seeing improved results.
Here are the biggest takeaways from this week in solar.
Following SunPower's (NASDAQ: SPWR ) outstanding earnings report last week, SunEdison (NYSE: SUNE ) became the second major U.S. company to report. Results were mixed, with revenue of $960.7 million on a non-GAAP basis but a loss of $0.48 per share. Remember that SunEdison's semiconductor business is still a drag on operations and the mix of projects kept on the balance sheet affected the bottom line as well.
What might be a bigger development long-term is that SunEdison retained 127 MW of projects on its balance sheet with a projected retained value of $257 million. These will be used when it launches a yieldco, which it filed documents with the SEC for on Feb. 18.
First Solar (NASDAQ: FSLR ) is the next to report earnings, coming Tuesday of next week.
First Solar makes a move into silicon
Since it began operations, First Solar has been making cadmium telluride solar panels that were less efficient than silicon competitors but were much lower cost. That position has changed in the past three years and as SunPower has cut costs and Chinese competitors emerged, and as a result, First Solar has been forced out of residential and commercial markets and focuses on utility-scale projects, where it has expertise and can leverage its low systems costs.
But First Solar kept an eye on commercial and residential solar and to get into the game purchased TetraSun last year with the hope of turning the start-up's technology into a competitive advantage in markets that require high efficiency. The product is expected to be a 21% efficient cell, a couple of percentage points higher than high-efficiency cells from China, but still below 24%-plus efficient cells from SunPower, so it's a middle ground between efficiency and cost.
GTM Media reported this week that First Solar is "still on plan" to produce commercial-scale manufacturing of the TetraSun process this year and if it can it opens up new markets for the company. Keep an eye out next week for more discussion about TetraSun, because I think there's limited upside out of utility scale projects with its current CdTe technology.
News and notes
Here are a few more items that missed the headlines this week in solar.
- Canadian Solar (NASDAQ: CSIQ ) sold 3.2 million shares of common stock and $150 million in convertible notes this week. The offering will allow the company to build more projects, expand into residential solar, and even expand into next generation manufacturing. The downside is that it dilutes shareholders and reduces upside on the stock.
- JA Solar (NASDAQ: JASO ) announced that its multi-crystalline solar cells have surpassed 19% conversion efficiency. This is a step up from 18.3% in August and is an important step toward staying ahead of competition.
- ReneSola announced it is supplying 13 MW of panels to a project in Wiltshire, England. Delivery is already under way and will be completed by the end of Q1.
That's all for this week in solar. Check back to fool.com for more solar coverage next week and my take on earnings reports as they come out.
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