The supply agreement recently announced by Solar Frontier and General Electric illustrates the point. Solar Frontier started producing its CIGS modules two and a half years ago and has shipped 100 megawatts since. But the construction of a new factory, set to have 900MW of annual production and scheduled for completion next year, has positioned it to be the largest CIGS maker worldwide and rival the capacities of other major manufacturers, whether they produce thin-films or crystalline silicon modules.
The ability of Solar Frontier to finance and expand its manufacturing and presumably delivering good products is key to attracting customers that also want to see high volumes of sales in the market. GE has talked a lot of about its keen interest in the solar market in the past, but it laid out more clearly what the attack plans are on Tuesday when it said it would buy modules from Solar Frontier while also rolling out cadmium-telluride modules through PrimeStar Solar, a Colorado company with 30MW of annual capacity and counts GE as its top investor. GE plans to package the modules with its own inverters and offer power plant engineering services as well.
Greg Ashley, chief operating officer for Solar Frontiers American operations, said GE has turned to Solar Frontier because of Solar Frontiers plan to boost production quickly. The Japanese manufacturer expects to produce over 600 megawatts of solar panels in 2011, most of which will be rolled out in the second half of the year, Ashley said. Aside from completing the 900MW factory, the company also is expanding its two existing factories from a total of 80MW to 100MW, he added. The ability to expand manufacturing quickly sets it apart from other CIGS module makers, particularly those that have received hundreds of millions in private equity.
Many startups in (Silicon Valley) have been at it for a long time, but they still face bankability challenge for big projects, said Greg Ashley, chief operating officer for Solar Frontiers American operations. For a company to start from scratch to build CIGS modules and compete with us is extremely difficult.
CIGS module makers such as Nanosolar and MiaSole, are not beefing up its manufacturing at the same rate as Solar Frontier. Solyndra recently opened a factory thanks largely to a US$535 million government loan, and it expects to reach 300 megawatts of capacity by the end of 2011. Solyndra has boasted about its US$2 billion-plus supply agreements with distributors and project developers. But whether it can deliver attractively priced goods while also make tidy profits remains to be seen. Canceling its plan to go public back in June only raised questions about its long-term survival.