Pacific Beach Solar Panel Install Cost

So, what exactly is involved in calculating solar panels cost in Pacific Beach? When thinking about solar power very few people know the way the cost of solar panel systems is actually measured. Or even, for that matter, do we automatically grasp the connection relating to the cost of solar power and the value of solar power. We all know that gasoline prices are in dollars per gallon. We likewise are all aware of approximately how far we’ll be able to drive after spending 40 bucks for a tank of gas. In contrast to a tank of gas, the value of which can be consumed pretty much instantly, solar panels deliver their value across a period of time.

Home Solar Panels Cost

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SunPower Corporation (NASDAQ:SPWR) is a global solar energy solutions provider. It operates in the specialized semiconductor industry and was incorporated in 1985. It is headquartered in San Jose, California and has offices in North America, Europe, Africa and Asia. The company's operating activities include designing, manufacturing and supplying solar panels and solar systems to a wide range of clients. SunPower's customers range from residential to utility customers, including businesses and the government. The company also offers different products related to solar systems that include inverters and control chargers. SunPower Corporation reports its revenues based on geographical segmentation. The company generates about 70% of its revenue from America, 20% from EMEA (Europe) and 10% from APAC (Asia Pacific). The revenues from Europe and Asia have been decreasing over the years partly because of the growing American demand and partly because of the recent economic conditions of Europe. NRG Solar is a significant customer of the company, being responsible for 35% of the revenue generated from America or in aggregate terms 24.5% of the entire revenue. SunPower is backed by Total S. A., the fifth largest publicly-traded energy company in the world. Total has a controlling interest in the company and holds around 66% shares of SunPower.

Market Performance

SunPower Corporation is listed on NASDAQ and is currently trading around $30. 2013 proved to be a good year for the company as far as market performance is concerned. Shares of the company appreciated consistently during the year. In the first week of January, shares were trading at around $6 but now they are touching $30. The solar industry has been facing difficulty in the past two years but now it seems that the market is regaining confidence in the solar industry.

EPS of the company also improved during 2013 which caused the share price to increase. Revenues have also been improving over time and SunPower has posted a CAGR (compound annual growth rate) of 4.95% since December 2011. These growing financial figures were responsible for the positive trend of the share price.

Industry Profile

It appears that the solar industry is starting to recover. The recent years have been rough, especially for American solar businesses because of the dumping exercises carried out by China. The subsidizing of solar companies by the government of China enabled them to sell below their production costs. This forced the American companies to cut prices and suffer losses. Oversupply in the industry was also a major factor in the reduction of prices and diminished earnings. The sales of Chinese solar firms in Europe are capped now due to limitations imposed by the European Union. Once the US and Europe have settled the Chinese solar panel issue, profits in the industry will begin to grow. Furthermore, China has banned the construction of any further solar panel factories. All these developments enhanced the investor's confidence in the solar industry which in turn is reflected in the market performance of the American solar companies. "We're at a point now where demand starts to be driven by cold, hard economics rather than by subsidies and that is a game changer," says Jason Channell of Citigroup.

The solar industry is poised for future growth. According to IEA, renewable electricity will surpass output from natural gas and double the generation from nuclear plants by 2016; becoming the second most important source of energy after coal. It is worth noting that the growth of renewable energy has always been underestimated in projections. For instance, in 2003, IEA predicted that non-hydro renewable energy would represent 4% of the global generation by 2030 but the industry reached that figure in 2003. According to BNEF, renewable energy will account for around 69-74% of new capacity added by 2030. Estimates by HIS predict the global PV (photovoltaic) market to grow by 17% in 2014. All of this points toward the fact that the solar industry will grow in the future.

BNEF also projects a 20% increase in PV installations by 2017. The emerging markets are USA, China and Japan, accounting for 52% of the solar demand in 2013 compared to 13% in 2008. Overall, the industry is set for growth but the question is, on whose expense? China and the US are the two main competitors in this industry. The relative strategies and actions of their governments could affect the companies based in both countries.

Global Production Leader

China is the largest supplier of PV modules. It plans to add 10 GW of solar capacity to the system each year until 2015, aiming for 35GW by 2015. The current capacity is 5GW. Chinese companies like Trina Solar, Yingli Solar and Hanergy have low production costs and are offered subsidies by the government. Therefore, they manage to compete on very low costs, rendering the US based suppliers unprofitable.

The excess production and oversupply of solar panels by Chinese manufacturers reduced the price margins in the industry. This oversupply has been adversely affecting the global solar industry for the past few years. The capping of Chinese solar panels by the EU and the restriction of the Chinese government on the establishment of new solar panel installations has helped in improving the conditions of the industry globally. This, however, presents a problem for the American solar companies because the Chinese suppliers are likely to converge upon the attractive US market. This development could pose a serious hindrance to the growth of US based companies. China still produces the cheapest cells and the efficiency of the cells is also competitive. American companies need to find a way to produce cost effective cells to counter China's competitive advantage. To encourage competition, The U.S. Commerce Department set anti-dumping duties ranging from 18.32% to 249.96% on solar-energy cells imported from China in 2012. This provides a level playing field as far as the American market is concerned. In Europe, the market is equally competitive for both US and Chinese firms because China's sales have been capped. In Asia, as expected, Chinese companies have a clear advantage over their American counterparts.

Catalysts

Residential Leasing Program

SunPower's leasing program is a competitive advantage for the company, as it allows the consumers to install their energy systems without paying all charges upfront. Consumers can save up to 10% or 15% on their electricity bill and be eco-friendly at the same time. SunPower is trying to bridge the gap further by lowering the costs of the system and improving the efficiency. It is aiming to enhance efficiency by 10% and reduce panel costs by 35% in 2015. The residential lease program has attracted 16,200 customers since 2012. "Our residential lease business remains strong, with demand outstripping our financial capacity in the first quarter," said Tom Werner, SunPower's CEO, during a call with analysts to discuss quarterly earnings. The company has been fuelling its finance requirements from Citi, Credit Suisse and recently from US Bancorp. These leases are a competitive advantage for SunPower because they help in reducing the overall energy costs of the consumer.

Differentiated Products

Maxeon cells that are being manufactured by SunPower are the most efficient cells to date. They are 24% efficient. Provided the company manages to reduce the production cost of the cell, they would be every one's first choice.

SunPower's Oasis C7 is a solar photovoltaic tracking system that concentrates the sun's power seven times to achieve the lowest levelized cost of electricity (LCOE) for utility-scale solar power plants.

The leading technologies offered by SunPower are its differentiated strength and can help the company to grow.

Research and Development

SunPower is involved in research with King Abdullah University and the French Laboratory of Interfaces of Physics and Thin Films. Total S. A. is also working in solar R&D which could also benefit SunPower. Total is working in collaboration with:

LAAS: (Laboratory for Systems Analysis and Architecture - Toulouse, France) to enhance the efficiency of photovoltaic modules using a systemic approach.

IMEC: (Interuniversity Micro Electronics Center - Louvain, Belgium) to decrease the amount of silicon needed for cells and improve their efficiency

LPICM: (Interface and Thin Film Physics Laboratory - Saclay, France), a joint research facility of the French National Center for Scientific Research (CNRS) and the Ecole Polytechnique's engineering school with a combined team working on crystalline silicon thin film technology.

SunPower's exposure to extensive R&D is reflected in its technologically advanced products.

Valuation

P/E ratio of the company stands at 26.8x and PEG ratio at 0.76x. This indicates that the company's growth would be higher than what market is paying for a dollar of earnings. In simple terms, the market perception is not in line with future growth and we can say that the price is not perfectly correlated to the anticipated growth. Industry growth estimates are 17.09% but the street expects SunPower to grow by a staggering 30%.

With growth estimated at 30% for the next 5 years the multiplier to value the company should be higher than its P/E. That is why we are taking a relatively higher multiplier of 35x.

The mean price target is $35.7, using an average multiplier of 30x which is also above the current price. However, we will use a higher multiplier of 35x and a target price of $42. These estimates give us a 25% upside on SunPower.

Conclusion

SunPower Corp. is well-positioned in the solar industry. It has highly advanced and differentiated products, which, despite their high costs are capable of competing with the low cost and less efficient solar modules. With its intense exposure to R&D, we believe that the company will be able to compete on the cost basis in the near future. It has the potential to become the leader in the solar industry. With the anti-dumping legislation enacted in the US, cap on China's sales in the EU and plans to initiate global leasing, SunPower has an opportunity to penetrate these markets. The top quality cells, Maxeon, enable the company to compete with other American counterparts like First Solar. As far as Asia is concerned, the market will continue to be influenced by China until the solar giants of America can develop a cost effective solution.

Overall, the future of SunPower Corp. is bright whether fueled by their differentiated technology or by the backing of Total S A. The target price of the company indicates further price growth. So, our call on the shares of SPWR is a BUY.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Voyagerix/iStock/Getty Images If the power goes out at your home for a significant period of time, or if you have a home that is beyond the reach of the power lines, heating and lighting your home without electricity may be a bit more difficult, but it can be done using alternative energy sources. For heating and temporary lighting, appliances that burn kerosene, propane, wood or other fuels are a viable option, but for long-term lighting, battery or solar-based technologies may be safer. Wood A fireplace or a wood stove is a reliable way to provide both heat and a small amount of light for your home, as long as you have a steady supply of wood available. Harvesting, cutting, splitting, transporting and storing enough wood for a season can be a lot of work, and it may not always be possible, such as for those who live in cities. Many wood stoves can also be used for cooking and heating water, and newer models are both much safer for your health and much more efficient. Kerosene Kerosene heaters are a popular way of heating homes in many areas, especially for emergency or supplemental heating purposes. While kerosene burns relatively cleanly, it still has the potential to produce carbon monoxide, so proper ventilation and a working carbon monoxide detector are recommended. Local building codes may forbid or regulate the use of kerosene heaters, so check with your city building and permit department before buying one. Kerosene is also commonly used as a fuel in oil lamps for lighting. Propane/Natural Gas Many propane or gas-fired forced-air furnaces will not run without electricity, even models that use pilot lights, as they require the blower fan to distribute the heat. Some steam or hot water boilers will run without electricity, but in many cases, you will need to rely on alternative heating sources. Wall-mounted space heaters are available in versions that burn either natural gas or propane. Most models do not require electricity to operate, though some may have optional fans for distributing the heated air that require electricity. Externally vented wall heaters are the best choice, because they allow the combustion gases to exit the home through the flue or vent. Models without external vents, also called ventless heaters, are available, as well, but you must ventilate the room properly to avoid excessive carbon monoxide buildup. Check your local building codes before installing either type of heater. Solar Photovoltaic panels, also called solar panels, can be used to generate your own electricity during the daytime and, by storing it with deep-cycle batteries, that power can be used for lighting purposes at night. Automotive-style 12-volt light fixtures can be connected directly to the battery bank, or regular 120-volt household lighting could be used through an inverter, which converts the 12-volt DC current from the battery into the 120-volt AC current a typical house uses. Solar energy can also be used to provide supplemental heating for your home. Simply opening the curtains covering south-facing windows during the day can allow heat from the sun to warm your home, but you can also build or buy passive solar heaters to increase the heat output. Materials like stone and concrete used indoors can regulate your home's temperature. Because such materials are so dense, they take time to adjust to temperature changes. During the day they absorb heat from the sun, then slowly release it at night. Other Candles and lamps fueled by lamp oil can be used for lighting, as well as rechargeable solar lights or lights powered by disposable batteries. Both lamp oil and batteries may get expensive in long-term situations, however. For temporary situations, portable generators can be used for lighting and for powering the central heating system in some cases. Related Searches References EPA: Does Your Wood Stove Have A Dirty Little Secret? Web MD: Carbon Monoxide Poisoning - Topic Overview CSPC: CSPC Stresses Kerosene Heater Safety Fairfax County, Virginia: Ventless Fireplace Saftey Department of Energy: Planning for Home Renewable Energy Systems Home Power Magazine: Solar Electricity Basics Department of Energy: Passive Solar Home Design Photo Credit Voyagerix/iStock/Getty Images Promoted By Zergnet Comments Please enable JavaScript to view the comments powered by Disqus. You May Also Like How to Heat Your House Without a Furnace With heating bills rising all the time, it’s no surprise that people cannot longer afford to keep their furnace on like they... 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