Citing what it calls “the limitations presented by the unanticipated volatility within the financial markets,” XsunX said it plans to reduce its budgeted manufacturing requirements by two-thirds at its Oregon facility, while continuing to work to service existing sales agreements for its amorphous-silicon thin-film PV modules. The company is also reviewing the implications of the recently enacted renewable energy investment credits included in the federal stimulus package.
XsunX CEO Tom Djokovich provided the following statement. “In January the company began preparing modifications to its manufacturing plans that would require fewer manufacturing components and significantly less capital expenditures with the objective of providing sufficient manufacturing capacities of approximately 10 to 13 MW necessary to service our existing sales contracts. Our plans include reducing budget requirements to approximately $13 million, which is roughly one-third our current budget.
“The majority of cost reductions can be attributed to the need for significantly fewer infrastructure improvements, initial staffing, equipment, and operations related to the cost of goods sold. We believe that this will allow us to continue to add future manufacturing capacities as sales develop and allow the company to work within the limitations presented by the unanticipated volatility within the financial markets.”
The company also said it is reviewing the renewable energy manufacturing investment credit provisions of the American Recovery and Reinvestment Act of 2009, which provides up to $2.3 billion to fund a 30% investment tax credit (ITC) for manufacturing assets used to produce alternative energy products.
The bill also offers provisions in which developers of manufacturing facilities can apply for grants of up to 30% of the total cost of eligible projects in lieu of the ITC. These credits and grants apply to projects creating or retooling manufacturing facilities to make components used to generate renewable energy–areas in which XsunX is already carrying out activities.
On completion of the review of the ITC provisions, the company said it may elect to apply for certain benefits.