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ECD’s Uni-Solar unit accelerates PV production ramp as company enjoys record results

31 August 2008 | By Tom Cheyney | Chip Shots

unisolar Energy Conversion Devices (ECD) turned the corner into profitability in its recently completed fiscal year, largely on the success of its amorphous-silicon-based, flexible thin-film PV operation, United Solar Ovonic (Uni-Solar), proving that First Solar's not the only TFPV game in town.

The parent company announced Wednesday (Aug. 28) that its annual revenues more than doubled year over year, from $113.6 million to $255.9 million, $231.5 million of which came from solar product sales. Net income for the year rose to $3.9 million and operational cash flow to $28.5 million, compared to a net loss of $25.2 million and negative cash flow of $21.8 million in FY2007.

Uni-Solar produced 26.2 MW of a-Si product in the fourth quarter (a big jump from Q1's 10.4 MW), to bring its annual total to 73.6 MW. The company also saw its solar product sales pipeline reach $1.8 billion at the end of the quarter, compared to $1.2 billion at the end of the fiscal third quarter.

During a conference call with the investment community, president/CEO Mark Morelli and outgoing VP/CFO Sanjeev Kumar went into more detail about the company's performance and plans and fielded questions with the a plethora of photovoltaically inclined analysts.

Here are some key takeaways from the call:

Uni-Solar rolls out about nine miles (>14 km) of solar laminates per day off its production lines. If the lines run full bore 24/7 every day of the year, that would come out to 3285 miles of flex PV per annum.
After spending about $117 million on capital expenditures in FY08, the company plans to double down and allocate between $230 million and $240 million in the new fiscal. This is no surprise, since Uni-Solar is now shooting to have 1 GW of nameplate capacity online by 2012, a big jump from its previous 300-MW target (which is now the nameplate goal for 2010). Morelli also told participants to expect news "quite quickly" on site selection for future factories, given the accelerated production ramp plans.
Better factory utilization and lower materials costs were a big part of the reason the company's margins (33.5% for Q408) were ahead of previous guidance. Also ahead of schedule are the ramps of the new Greenville facility and the laminate line in Tijuana, Mexico, according to the chief exec.
Morelli cited a "relentless focus on operational excellence" at Uni-Solar. Ramp times have been reduced by 76% since the startup of the company's Auburn Hills 1 line to that of the new Greenville 1 factory--from 37 months to 9 months, according to Morelli. During the same period, the capex per watt came down from $2.22 to $1.81 for the two facilities. The goal is to drive ramp times to eight months or less and capex per watt to under $1.70.
The efforts of a newly formed industrial engineering/operations team have paid off, the company honcho noted. A 10% reduction in cycle times on the massive roll-to-roll cell lines has been achieved by optimizing the material handling systems, faster deposition material changeovers have resulted in a 5% pop in tool uptime and throughput, and lower cost yet higher quality grid wire materials have all led to about $1.5 million in savings and an additional 2 MW of production capacity per 30-MW line.
Despite the apparent capacity pop from these manufacturing enhancement efforts, no plans to update nameplate capacity ratings are in the works, but Morelli said they "will have to go back at some point" and deal with that issue.
Morelli mentioned that one of the team's focus areas is on "continuous improvement of its base of equipment suppliers" as well as on efforts to extend that base. He also noted in response to one question that a greater proportion of cost reductions will be coming from the materials suppliers in FY09.
Kumar mentioned that the retrofit of first-generation tools at the original Auburn Hills fab continues, and that although the new deposition equipment will be ramped in the newer lines in September, the cell cutting and lamination gear will not be delivered until the second fiscal quarter and won't be ramped until January 2009.
Roughly half of the company's PV laminates--its 144-W product line--boast 8.5% conversion efficiencies, while the rest come in around 8%. But how they perform in the field depends on level and intensity of sunlight, placement or orientation to the sun, and temperature (the laminates love hot weather), Morelli explained. He did reiterate Uni-Solar claim to anywhere from a 10% to 30% cost per kilowatt-hour advantage compared to other PV solutions.
Morelli confirmed that Uni-Solar will be providing the PV for the rooftop of the General Motors' transmission plant in Maryland and doesn't see that much of an impact yet from the failure of the US Congress to extend the solar investment tax credit, although domestic sales have slowed down a bit. (The company does most of its business in Europe.)
One area that was not addressed during the call was the status of the company's next-generation TFPV R&D, including the so-called "nanocrystalline-silicon" multijunction structures, which could push up conversion efficiencies, at least in theory, several percentage points.

What's in store for ECD in 2009? Most of Uni-Solar's annual production is already sold out, and the parent company expects to hit between $455 million and $485 million in revenues, with the solar piece accounting for $430 million to $450 million of that. Those numbers represent another big jump in sales, but the big question on many peoples' minds is whether Uni-Solar can execute on its capacity expansion game plan and keep its impressive momentum rolling along.