Perris Solar Questions

So, what exactly is involved in calculating solar panels cost in Perris? 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.

Solar Hot Water Heater

PerrisĀ 3 Undervalued Solar Leaders

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.

How Much Does It Cost To Install A Solar Panel

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solar cell research image by Albert Lozano from Fotolia.com If you go camping or hunting, or simply want to reduce your electricity bill, then a solar panel might make a good investment for you. Solar panels can charge batteries and run tools and appliances, all for free. They require no fuel, and because they have no moving parts, they need very little in the way of repair and maintenance. The only cost associated with solar panels is the up-front purchase cost. Even this can be reduced by making your own solar panels at home. Things You'll Need Solar cells Sheet of plywood Saw Narrow wooden strips Electrically conductive glue Spool of wire Wire cutters with wire-stripping attachments Silicone caulk Calculate the number of solar cells you will need to make your solar panel. Different cells provide different voltages. Divide the voltage you want your panel to produce by the voltage rating of your solar cells. This will give you the number of cells you need to produce 12 volts. Add a couple volts' worth of cells to this number to eliminate the danger of backcharging, which can damage your solar panel. Cut the plywood into a size just large enough to hold all the cells you need for your panel. Glue the narrow wooden strips all around the perimeter of the plywood you have cut. After your cell is assembled, these will hold up the Plexiglas cover to protect your panel from damage. Leave a small gap between two of the strips to run the wires out of the panel. Attach the solar cells to the panel of plywood, using the electrically conductive glue. Leave a small amount of this glue peeking above the top of each cell in order to form an electric link to the terminals on the bottoms of the cells. This edge of glue will be referred to as the "negative terminal" of each cell. Cut 6-inch lengths of wire from your spool of wire, using the wire cutters. Make as many short wires as there are cells in your panel, minus one. Remove 1 inch of insulation from one end of each wire, and 3 inches from the other ends, using the wire cutters. Glue the 3-inch-bare ends of these wires to the tops of the solar cells. Do not let any glue run from the top of the cell and touch the negative terminal of that cell. Do not let any bare wire touch the negative terminals of the cells. Leave the final cell without a short wire on top. Glue each of these wires to the exposed glue peeking over the edge of the cell next to it, after having allowed the glue on the other ends to dry. Allow this glue to dry. Cut two 3-foot sections of wire off the spool. Remove 1 inch of insulation from each end. Glue one to the negative terminal of the first cell, the one without any wire connected to it. Glue the other to the top of the cell on the other end, without any wire on top. Other People Are Reading How to Make a Solar Panel How to Make Homemade Solar Power Run the long wires out through the gap between the wooden strips. Glue them to the sides of the solar panel so that there is no possibility they will touch each other, which could short out your panel. Cut the Plexiglas sheet to match the size of your panel. Glue it to the top of the wooden strips. When the glue is dry, seal all the edges with silicone caulk to protect it from water. Tips & Warnings You can increase the power of your panel without changing the voltage by building other panels identical to the first. Connect their negative terminal wires to the negative terminal wire of the first panel, and their positive terminal wires (the wires connected to the top of the last solar cell) to the positive terminal wires of the first panel. Related Searches References SchoolPower Naturally: Solar Education for NY Solatron Technologies: Learn How to Wire Solar Panels and Batteries Photo Credit solar cell research image by Albert Lozano from Fotolia.com Promoted By Zergnet Comments Please enable JavaScript to view the comments powered by Disqus. Resources Green Living Tips: Solar Panel Basics You May Also Like How to Make a Solar Panel Solar cells convert the energy of the sun into electricity. By using items commonly found in the home or your local hardware... How to Make a Solar Panel Model A model of a solar panel can be a great visual aid for your science projects. Models help people to visualize how... How to Make Homemade Solar Power Humans have been using solar power for thousands of years to heat their homes. Making solar panels to collect and store the... Alternative Energy: How to Make Solar Cells & Solar Panels Free Solar Panel Construction Plans Free solar panel construction plans are available in a variety of places online. Some tutorials cover how a specific person built their...

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