In a sign of optimism about the stock market's reception to clean energy start-ups, California solar company Solyndra on Friday filed documents to go public.
The Fremont, Calif.-based company said it plans to raise $300 million in a public stock offering to expand into a market it projects to grow at 34 percent annually.
Four-year-old Solyndra makes a very specialized solar module designed for flat commercial rooftops. The system, which looks like long rows of black tubes, uses flexible thin-film solar cells shaped as a half cylinder to generate electricity from sunlight. The shape increases the amount of captured light while providing cooling from the air.
Solyndra's rooftop solar arrays are made up of hundreds of tube-shaped solar cells.
(Credit: Solyndra)The company received a $535 million loan from the Department of Energy's loan guarantee program earlier this year, which it used to open a manufacturing facility in California. That loan, authorized in the 2007 Energy Act, was the first that the incoming DOE had given after a four-year backlog of applications.
Solyndra said it intends to use the proceeds from a public stock offering to finance the expansion of its second fabrication unit. It has also applied for a second loan guarantee for $469 million from the DOE in September, it said.
Billions of venture capital money has been put into green technology companies, but there have been few successful stock market offerings that have rewarded early investors and fueled further growth.
Earlier this year, Watertown, Mass.-based battery company A123 Systems went public and its stock has largely maintained its initial rise. That successful offering was seen as a sign that investors are interested in the potential for energy technology companies despite the economic downturn.
In its S-1 documents, Solyndra indicated that it had revenue of over $174 million and a net loss of nearly $120 million for the nine months of 2009. In the past several weeks, Solyndra announced distribution agreements with companies outside the U.S.
Demonstrating that it plans to act quickly with clean-energy loans, the U.S. Department of Energy has made $535 million available to solar start-up Solyndra.
The loan guarantee, announced on Friday, is the first to be approved by the Department of Energy in four years. As part of a broader government stimulus plan, the administration of Energy Secretary Steven Chu has committed to quickly disbursing loans to clean-energy companies.
Solyndra's rooftop solar arrays are made up of hundreds of tube-shaped solar cells.
(Credit: Solyndra)For Solyndra, the loan will partially finance construction of a second factory in California. The 4-year-old company, based in Fremont, Calif., has designed cylinder-shaped solar cells that are assembled onto arrays for the flat roofs of corporate and industrial buildings.
The flexible cells are made from a combination of CIGS (copper, indium, gallium, and selenide), an alternative to traditional silicon cells. The company began making the cells last year. The second factory will allow it to make 500 megawatts' worth of cells a year, according to Solyndra.
For Solyndra, the loan allows the company to ramp up more quickly and reduce the cost of the solar power its product produces. The plant is set to employ about 1,000 people, once operating, and employ 3,000 people in its construction.
To the broader green-tech industry, the Energy Department loan is an encouraging sign. Several green technologies have been developed over the past five years, but a number of companies are struggling to get the financing available to scale up their operations and sales.
The money for Solyndra was appropriated in the Energy Act of 2005. On taking office, Chu made dispersing existing and newly available loans a high priority, and created a process specifically for evaluating and expediting them. With the passage of the massive government stimulus package earlier this year, the federal energy agency has billions of dollars available for loans, for which a number of green-tech companies have applied.
Solyndra's loan is a "conditional commitment," which means that it still needs to meet certain conditions, including having its own equity available to get the loan.
Solyndra, a start-up making thin-film photovoltaic systems, has secured $600 million in funding.
It's additionally secured $1.2 billion in contracts from clients in the U.S. and Europe, the Fremont, Calif.-based company revealed Tuesday.
What start-up gets that kind of funding and client promise? Basically, one that's invented thin-film solar panels shaped like old-school fluorescent lightbulbs.
Solyndra's series of tubes offer a unique angle on solar power.
(Credit: Solyndra)Since 2005, Solyndra has quietly been developing a proprietary CIGS-based thin film photovoltaic (PV) system and a staff of more than 500 employees.
CIGS is a material that includes a combination of copper, indium, gallium, and selenide. It's now being used by quite a number of companies to make thin-film solar cells among other things.
Solyndra's cylindrical PV panels don't have to be spaced to leave room for rotation toward the sun as with flat solar panels. The panels are actually rows of cylindrical tubes which are installed horizontally and close to one another.
The tubes can "capture sunlight across a 360-degree photovoltaic surface capable of converting direct, diffuse, and reflected sunlight into electricity," according to Solyndra.
Solyndra panels consist of tubes that can absorb sunlight from all angles.
(Credit: Solyndar)The company also says that because of this unique shape and mounting system, more productive solar surface area can be packed onto one roof than with conventionally shaped panels. Subsequently, its system is able to generate "significantly more solar electricity on an annual basis" compared with flat panels, according to the company.
Because Solyndra's tube panels are lighter and allow wind to pass through them easily, there is less construction needed in terms of rooftop anchoring or shoring up a roof for significant weight-bearing. Because of this, according to Solyndra, its system is significantly cheaper to install than flat-panel systems
While solar power may not be considered the complete solution to U.S. energy woes, many commercial, industrial, and public facilities are looking at using solar photovoltaic systems as a supplement to their facilities' energy diets. In April, for example, the landmark Staples Center in Los Angeles announced it will be covering its 24,196-foot roof with photovoltaic modules.
Thin-film solar cells, particularly CIGS panels, have been attracting a lot of attention and funding. SoloPower, NanoSolar, and Ava Solar are thin-film solar companies that have announced funding in the hundreds of millions over the last few months. Even IBM is getting into CIGS solar cells through a partnership with a Japanese semiconductor equipment manufacturer.
Solyndra's funding comes from a mix of venture capital and private equity investments totaling $600 million to date. Solyndra investors include Virgin Green Fund, the Abu Dhabi-based Masdar, Rockport Capital Partners, and Argonaut Capital, according to a company spokeswoman.
The company has already been expanding its current plant, Venture Beat reported early Tuesday morning.
Solyndra counts Solar Power, the company contracted to do the Staples Center, and Phoenix Solar, a large solar power integration company in Europe, among its satisfied customers.
"By eliminating the need for roof-penetrating mounts and wind ballasts, PV arrays with Solyndra panels can be installed with one-third the labor, in one-third of the time, at one-half the cost. For commercial rooftops, PV module installation time can now be measured in days, not weeks. For flat commercial rooftops this is game-changing technology," Manfred Bachler, chief technical officer at Phoenix Solar, said in a statement.
Renewable energy provider EDF Energies Nouvelles has plunked $50 million into Nanosolar and will get access to output from Nanosolar's factories in 2009.
Nanosolar specializes in copper-indium-gallium-selenide (CIGS) solar cells. CIGS cells aren't as efficient as silicon solar cells, but they cost less and can be integrated into building materials. Nanosolar's cells can be printed on thin, flexible sheets of metal.
The company became one of the first to start producing CIGS commercially when it started cranking out production in December. Some other competitors have had to delay production. Right now, only Global Solar in Arizona also produces CIGS commercially.
A few weeks ago, we heard consistent rumors that Nanosolar had been seeking additional investment and has been telling investors that the company is worth around $2 billion. The company hasn't confirmed the $2 billion part (though we've heard it from a lot of people), but this confirms the "seeking investment" part, I guess. In 2006, Nanosolar raised $100 million. Investors include Mohr Davidow Ventures, Larry Page, and Sergey Brin.
EDF serves nine European countries and has 1.4 gigawatts of installed capacity and is building 1.1 more gigawatts.
CIGS looks like it could pay off.
Nanosolar and Solyndra, which both develop copper-indium-gallium-selenide (CIGS) solar cells, are looking at raising additional funds, according to sources, and both companies have put large valuations on themselves.
According to sources, Nanosolar is telling investors it will have a valuation, after another round of funds, of around $2 billion. Solyndra says it is worth $1 billion. Not bad for companies with combined current revenues at the moment that probably would have difficulty rivaling the take of a reasonably located convenience store. Nanosolar just started shipping a few solar cells to customers at the end of 2007, and Solyndra is ramping up toward production.
I haven't confirmed these rumors, and they might be wrong, but they have been consistent.
Nanosolar CEO Martin Roscheisen has said that Nanosolar does not have a term sheet, a document that provides details about business prospects and a funding proposal, at the moment. Roscheisen, however, has not discussed valuation.
Both Nanosolar and Solyndra were contacted for official comment, but no response has yet been received. Companies generally don't comment this early on financial issues such as valuation.
The high valuations seem to be driven by the current dynamics of the solar business. Demand continues to outstrip supply. The shortage of silicon continues to hamper manufacturers of silicon solar panels. CIGS solar panels aren't as efficient for converting sunlight into electricity as silicon panels, but advocates say they will cost less. The active materials in CIGS panels also aren't in dire supply at the moment either.
The love affair that investors have had with First Solar, which makes thin film solar panels with cadmium telluride, also persists, which lends some glow to CIGS companies. First Solar went public at $20 per share in late 2006 and now trades at $207. (Before the recent swoon on Wall Street, it hit $283.) First Solar has also seen tremendous growth in revenue and earnings with each passing quarter.
When it went public, First Solar was valued at close to $2 billion. It currently is valued at $16.3 billion. Some believe the company is overvalued, but those are the numbers.
First Solar, however, was not your ordinary start-up. The company's founders started tinkering with cadmium telluride technology in the 1980s. By the time the company went public, First Solar had already begun mass production.
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