SunPower increasing capital spending by at least 80% in 2015

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Major PV energy provider SunPower is set to significantly increase capital spending (CapEx) in 2015.

SunPower has guided 2015 CapEx to be in the range of US$300 million to US$350 million, compared to 2014, which totalled US$166.9 million and within its guided range of US$150 million to US$170 million. 

The CapEx increase equates to at least an 80% increase over the previous year and at the high-end of guidance would equate to a 110% increase. 

CapEx in the first quarter were expected to be in the range of US$40 million to US$50 million as construction ramp of Fab 4 in the Philippines continues. Fab 4 has a nameplate capacity of 350MW and is expected to come online around mid-2015. 

Tom Werner, chief executive and president of SunPower said, “Upstream, we executed well on our technology roadmaps and achieved record yields for our Gen 3 solar cell technology during the quarter. Operationally the ramp of Fab 4 is continuing with first silicon still expected mid-year and our 2015 volume target remains unchanged.”

SunPowers solar cell volume target for the year is only increasing by 140MW, with 25MW being added at Fab 2, 75MW at Fab 3 and 40MW expected to be ramped at Fab 4.

Fab 4 is expected to fully-ramp in 2016. The latest Gen 3 Maxeon solar cell technology is also being migrated to Fab 2 from Fab 4 in 2015, though further details were not provided in the earnings call.

SunPower is therefore expected to remain capacity constrained again throughout 2015. Solar cell poduction reached 1,233MW in 2014, while nameplate capacity was 1,300MW.

Actual module assembly nameplate capacity stood at 1,700MW at the end of 2014. 

R&D spending 

After cutting R&D spending in 2013 to US$58 million, down from US$63.4 million in 2012, SunPower spent US$73.3 million in 2014. Part of the increase in spending was attributed to an increase in R&D headcount, which increase from 300 in 2013 to 337 at the end of 2014. 

SunPower attributed US$10.3 million increase in R&D spending to the additional headcount and salary related expenses. The company also noted that part of the extra labour costs were also associated with consulting services in relation to its next generation solar cell technology. 

SunPower expects to reach production module efficiencies of 23% in 2015, using a simplified and therefore lower cost manufacturing process.
The company had previously reported that it had produced its first solar cells with over 25% cell efficiency in the lab in 2014. 

According to PV Tech’s annual R&D spending analysis of leading PV manufacturers, SunPower was the second highest spender on R&D activities after First Solar. 

In a soon to be published report within PV Tech’s sister technical journal, Photovoltaics International, dedicated mono c-Si capacity expansion announcements totalled almost 2GW in 2014. However, cell capacity expansion announcements were dominated by advanced multi c-Si, primarily based on PERC technology of nearly 6GW. 

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