The solar energy industry is dramatically changing from being heavily reliant on government subsidies to being an upsetting force.
This impact of the solar power is borne out of its current competitive costs and fast innovation.
SunPower’s place in the energy industry
SunPower is one company that is at the centre of this brewing energy revolution. Every solar panel that this company creates is very efficient. In fact, each solar panel that they produce is regarded as the most efficient in the world.
On this company’s Analyst Day, it announced the tripling of its production capacity for the following five years. The company is also doubling its residential solar market.
SunPower’s CEO Tom Werner, sat down for an interview after his company’s Analyst Day. The interview centred on SunPower’s future in the burgeoning solar energy industry.
The interview was conducted by Travis Hoium of the Motley Fool. Following are some excerpts in that particular interview.
Hoium: You had Analyst Day yesterday and a lot of really exciting announcements in the last couple of weeks, but before we dive into that I want to get a little bit of a feel for what the solar industry is, how big the opportunity is, and where SunPower fits in it.
Werner: When we did Analyst Day we did talk about some specific things we are doing but we talked about the backdrop we’re operating in and it’s really phenomenal. I mean if you think about how solar a 30% annual compound growth rate has for 20 years.
So, you say this is a really big industry, it must have a huge impact or a big market share. But in fact, in the electricity generation industry we’re 1%. So, while we’ve grown 30% a year, we’re 1% of a $2 trillion market. Really we’re just at the beginning.
It’s a $120 billion solar industry that’s just at the beginning. When you look at out to 2035 the electricity generation industry will be twice as big, $4 trillion, and we think — and industry analysts think — that solar distribution will be 10 times what it is today. So were just at the beginning; this is a massive opportunity.
Hoium: …..your X-Series panel is 21.5% efficient versus a commodity panel that’s 14% to 16% efficient, and you highlighted that a few times that you’re getting about 50% more power from SunPower panels if you put them on your roof, for example, but that’s not quite the whole story because the degradation is lower as well. Is that correct?
Werner: Well, as you move to selling energy then what matters is the energy production over the life of the system. So if you start with a 50% advantage, then you’re interested in how does it perform over the life of the system?
And our advantage grows over time as our panel produces more energy per rated watt.
It also degrades more slowly because it’s fundamentally a different architecture.
And it lasts longer, so you might sign a PPA [power purchase agreement] or a lease for 20 years, but the system is going to last 25, 30, even 40 years. So we have a higher residual value as well. And so, as the industry moves to becoming an energy industry, that’s to our favour because that’s what customers buy.
