Archive for the ‘Merlin Technology’ Category

by Matt Margolis

I reached to for GTAT for comment and the company representative declined to discuss who GT works with on its technology development programs.

Background

GT Advanced Technologies (GTAT) mentioned during the Q4 2013 prepared remarks that its Merlin technology, “comes out of a research operation we established in the Bay Area, over a year ago, to focus on advancing the state of the art in the design and assembly of solar cells and modules”. GT referred to a “research operation,” which immediately set off my alarm that Merlin product was not tested inside a Bay Area PV module warehouse, but instead it came out a R&D facility located in the Bay Area. GT does not have a R&D facility or even an office inside the Bay Area, which only leaves one option; a research lab that is run by a leading PV module maker.

Merlin the Magnificent

Merlin is GT’s solution to improving the downstream solar equipment marketplace. The Merlin PV module offers a drastic improvement over current PV modules in 5 key areas; total system cost, solar cell efficiency, weight, flexibility and durability. GT’s Merlin technology is expected to deliver a total cost reductions of over 10% and cut silver paste use by up to 80%. The drop in silver paste usage as a result of Merlin’s patented design results in a lighter PV module, which may explain Merlin’s improved flexibility over other PV module designs. Additionally, Merlin demonstrated the ability to improve solar cell efficiency by 0.7% as well as significantly improving overall module durability. A solar cell efficiency gain of 0.7% doesn’t sound like much but when most solar cells are hovering around 17% it represents a 4% improvement. GT’s Merlin PV module technology is “agnostic,” and will improve the efficiency of any type of solar cell. GT also informed investors that Merlin would not be sold exclusively to any one potential customer, which opens the door for all PV module makers to enjoy GT’s game changing technology. Images below were taken from GT’s March Technology briefing.

(click to enlarge) (click to enlarge)

GT’s Long Term Relationship with Yingli

If I was to develop a game changing technology with a PV module maker I would not only want to the biggest fish but I would want someone I trust. Someone that I have worked with years! As it turns out Yingli Green Energy (YGE) not only was ranked #1 in 2013 for producing PV modules, but their relationship with GT Advanced Technologies (formerly GT Solar) goes back to 2002, when Yingli became GT’s first customer in China. Also, if you look at the various orders placed over time by Yingli the press releases contain language that translates to “hey scratch my back and I’ll scratch your back.” If you don’t believe me, read these comments between GT and Yingli’s within this order announcement from 2010 to that is focused on celebrating GT Solar’s 1000th DSS450 Crystalline Ingot Growth Furnace shipment as well as the very close relationship between the companies.

GT Solar International, Inc. (NASDAQ: SOLR), announced that it has achieved the milestone shipment of its 1,000th DSS450TM crystalline ingot growth furnace. The recipient of the system is long-time Chinese customer Yingli Green Energy Holding Company Limited.

 

GT Solar is a trusted and valued partner for Yingli,” said Mr. Liansheng Miao, chairman and chief executive officer of Yingli Green Energy. “Their ingot growth furnaces consistently produce high quality material which helps to reinforce our company’s reputation for delivering reliable products to our customers.

We are pleased that Yingli continues to express confidence in our ingot growth technology,” said Tom Gutierrez, president and chief executive officer of GT Solar.

Yingli Green Energy became GT Solar’s first customer in China in 2002 when they set up the first ingot, wafer and cell production lines at their Baoding headquarters. These production lines launched Yingli into the PV manufacturing industry and today they are one of the world’s leading fully vertically integrated PV manufacturers. Yingli has continued to invest in GT Solar’s multicrystalline ingot growth furnaces including the DSS240, which was introduced in 2003, and the current DSS450, which was introduced in 2007. Today, GT Solar has shipped over 1300 crystalline growth furnaces to customers around the world.

It’s very clear that Yingli and GT have a mutually beneficial relationship and both companies have admiration and appreciation of the benefits that have resulted from their long partnership. GT has enabled Yingli to continue to be a leader in the PV module space while Yingli’s investment in GT equipment has allowed GT to expand its business and invest money in its R&D to support the next generation of equipment that will benefit Yingli even more.

GT typically goes after strategic deals with the best and the biggest companies in their target market (i.e. Apple for sapphire), so it only makes sense that GT would reach out and try to work with one of the top 3 PV module makers in the world. According to Solarbuzz 2013 rankings the top 3 PV module makers were

  1. Yingli Green Energy
  2. Trina Solar
  3. Sharp Solar

So far I have focused on GT’s Q4 prepared remarks that indicated GT’s patented Merlin technology came out of a research operation in the Bay Area over a year ago. Secondly, I dug into GT’s closest and longest relationship with a PV module maker by the name of Yingli, that was consummated in 2002. Lastly, I provided 2013 Solarbuzz rankings of the top 10 PV module makers and focused on the top 3, which included Yingli. The only item that is missing to connect the dots is a R&D facility that is run by a leading PV module maker inside the Bay Area. As it turns out, Yingli opened up a Bay Area R&D facility in 2011 with the primary focus of accelerating their understanding of module performance and reliability. Yingli’s R&D facility located in the Bay Area is the perfect facility for GT to battle test its Merlin technology and truly understand how Merlin stacks up against the competition.

Yingli Opens up a Bay Area R&D Facility in 2011

Yingli announced on July 12, 2011 that the company was opening up a R&D facility in the San Francisco Bay Area for comprehensive product testing and evaluation. Furthermore, the announcement indicates that the new research and development lab will accelerate the company’s understanding of module performance and reliability. Additionally, R&D facility lab will allow Yingli to evaluate new technologies and deliver next generation products.

Yingli Americas also announces the opening of a new research and development facility in South San Francisco for comprehensive product testing and evaluation.

“Our new research and development lab will accelerate our understanding of module performance and reliability,” said Brian Grenko, Director of Operations for Yingli Americas. “This investment will enable us to more quickly evaluate new technologies, deliver next generation products, and better serve our customers throughout all stages of a project’s life cycle.”

“We now have the ability to offer product testing and development support within the U.S. for our customers here,” added Mr. Petrina. “We plan to use this new facility to proactively address market opportunities and trends to better support our pre- and post-sales efforts – a sign of our continued dedication to technical leadership.”

Image from Yingli

(click to enlarge)

Image from Yingli

Additional Images of Yingli’s PVTL obtained from Greentechmedia

Conclusion

GT mentioned that Merlin came out of a research operation that was established over a year ago. I was able to retrieve a copy of GTAT’s “Investing in Continued Growth and Diversification” presentation, that was discussed in August 2012 during Canaccord Genuity Growth Conference (image below). GT’s 2012 presentation clearly indicates its intentions of heading downstream and venturing into Module Manufacturing. The August 2012 presentation states GT is, “considering opportunities to move downstream solar equipment market to support next generation solar cell and module manufacturing.” As it turns out, it took GT less than 2 years to introduce Merlin as an opportunity and then bring it to the market. GT’s module manufacturing opportunity, which officially was introduced as “Merlin” technology, is referenced in the second bullet point in the image below.

(click to enlarge)

I’ve established clear evidence that GT’s Merlin PV module technology fits like a “T” within the primary scope of Yingli’s Bay Area PV Testing Lab’s that was established over 2 years ago in 2011. The contract announcement in 2010 between GT Solar (renamed to GT Advanced Technologies) clearly exhibits the co-dependencies, trust as well as a high level of engagement between both companies. Additionally, Yingli has been ranked near the top of the PV module supplier charts for the last several years. I believe Yingli is the “unnamed” collaborative resource, that helped GT battle test and monitor the results of GT’s game-changing Merlin technology within their Bay Area research operation, that opened its doors in 2011.

According to the market research firm IHS, Yingli claimed the #1 spot again in 2013 as the biggest PV module supplier, increasing the company’s market share from 7.4% (2012) to 8.3% in 2013. Solarbuzz reported that the top 2 PV module suppliers (Yingli and Trina Solar (TSL) accounted for 15% of PV module shipments in Q4 2013. Trina Solar is also long term customer of GT and has placed over $70m of solar equipment orders with GT since 2008. Trina Solar placed a $49m Polysilicon reactor order in 2008 and a DSS equipment order totaling $24m in 2010.

GT indicated that Merlin could generate $1B a year in annual sales based on a 20% market adoption rate by 2018. Yingli and Trina Solar have a combined PV module market share of 15% as of Q4 2013. GT likely “battle tested” Merlin at Yingli’s R&D facility in the San Francisco Bay Area and Trina Solar has been a long time GT solar equipment customer since 2008 or earlier.  GT is well positioned to sell Merlin to the top 2 PV module suppliers in the world and drive Merlin’s market adoption rate above 15% and generate over $800m of annual revenue from with just two customers much sooner than previously expected.

(click to enlarge)

GT’s CEO Tom Gutierrez indicated during the March technology briefing that, “we don’t build the trap and wait for the mice, we work directly with the customer to find out what they want”. I just hope GT has enough cheese to feed all the mice that will come crawling through the door for a bite of GT’s Merlin technology. Furthermore, it wouldn’t surprise me in the least, if Yingli and GTAT celebrate their long tenured relationship and continued partnership within Merlin’s inaugural order announcement in the 2H of 2014.

 

Advertisements

by Matt Margolis

Yingli Green Energy reported their Q4 2013 earnings on March 18th.  I wanted to take a closer look at their conference call to understand their solar industry outlook as well as to try to find Merlin.  No I am not talking about “where is Waldo” but where is GTAT’s Merlin technology headed?  GT’s CEO Tom Gutierrez did mention that Merlin would most likely not be named by the PV module makers but that we would be able to recognize Merlin if we saw it.  So my question is, where is Merlin?

 

Yingli Raises $83m of Cash for China Power Plants

Yingli announced plans on Friday to raise $83m via a secondary share offering.  The company indicates that the funds will be used to build solar power plants in China. The shares were offered 17% below Yingli’s closing share price on Thursday and the stock traded down nearly 13% on Friday.

 

Yingli’s Solar Industry Outlook

Looking ahead, we’re optimistic on the state of the solar industry in the U.S., Latin America and the overall region. 2014 is picking up where 2013 left off, demand is strong in our book of businesses filled and well-balanced. The momentum we are witnessing we will be enduring and we believe that we are just getting started in what will be a tremendous end market for years to come. We are confident that with cooperation and support of our customers and other key stakeholders, we will navigate the uncertainty of this new trade petition and soon be able to focus on our key mission, which is drive adoption of solar energy across the continent and the world. (Seeking Alpha)

 

Next Generation PANDA series modules: Bigger, Lighter & Highly Efficient

In 2014, we expect to mass produce a variety of new generation of other PANDA series modules, bigger but lighter weighted and high-efficiency. our proprietary goal is to create differentiated products that provide more value for our customers and accelerated the deployment of solar across the world.

A bigger PV module that weighs less than a smaller module is usually an oxymoron.  GT’s Merlin technology, which removes up to 80% of the silver paste from the traditional PV module design would certainly reduce the weight even if the PV module supplier increased the size of the unit.

 

Is Yingli’s next generation of PANDA series modules, that have been described as being; bigger, lighter, highly efficient and expected to be mass-produced in 2014 the first sign of Marlin?

Merlin Timeline

 

Full Disclosure: I am long GTAT and have no plans to buy or sell any holdings

 

 

 

 

by Matt Margolis

I apologize for the quirky article name but I wanted a tongue twist that everyone would remember.   In all seriousness there is an amazing solar rebirth that is underway and one of the solar growth areas fits inside the bulls-eye of Merlin’s target market.  Today most of us witnessed our portfolio’s that were filled with momentum stocks such as GTAT and Micron get annihilated.   The good news is the type of stock price movements that we saw today are gifts for investors, who had money left on the table and could take advantage of today’s sell off and add to their positions of their favorite companies.  There was one large exception to today’s sell off that I wanted to discuss and that company is called SunPower (SPWR), which traded up 6.75% on a day when then other solar names got taken to the woodshed.  SunPower reported earnings after the closing bell on Thursday and I wanted to dig into and share some of the comments and presentation material shared by management during the Q1 2014 conference call.

One of the first slides in SunPower’s Q1 2014 earnings presentation included the current state of installed PV efficiencies for the top 10 PV suppliers.  As you can see from the chart below the efficiency rates are mostly hovering at 17% with SPWR as the only PV supplier above 20%.  Any changes to the PV module design that also improves PV efficiency will certainly open up the wallets of the top 10 PV suppliers.

PV Module Efficiencies

Slide 6 of SunPower’s presentation (below) is something that gets me very excited about Merlin’s Multiplying Market, which is the roof top market place.  Sunpower touts their reliability and efficiency benefits of their rooftop systems.  GT’s Merlin Technology PV modules improve efficiency, are more durable and they will weigh substantially less than traditional PV modules due to Merlin’s patented design that can reduce the usage of silver paste by up to 80%!

It clearly shows why customers choose SunPower for their rooftop systems. On a typical space-constrained rooftop, SunPower panels produce over 50% more energy than conventional solar systems in the first year of operation. By year 25, this advantage will grow to 100% due to superior reliability and much lower performance degradation rates. The bottom line is that SunPower customers generate over 75% more energy over the lifetime of their systems. As customers and financiers become more educated about panel degradation rates and system residual value, SunPower’s technology advantages and associated economic benefits become increasingly clear. When incorporated into a yield co, or a lease vehicle, these long-term reliability and performance advantages are directly monetized. Chuck will share more information about our current thinking about yield cos and other monetization options. The primary driver behind this lifetime energy advantage is our higher panel efficiency.

Thomas H. Werner – Chairman, Chief Executive Officer and President You probably have a pretty good sense that there are very few markets where the Power Plant business and the rooftop business are big. It’s really Japan, North America. There’s a couple of emerging markets where they’re both big. And then what you see is one dominates the other. Europe is a rooftop business. Middle East is a Power Plant business. China is largely a Power Plant business.

(Seeking Alpha)

 

roof top

 

SunPower is Planning “Significant” Capacity Expansion Within the Next Few Quarters

We plan to produce between 50 and 100 megawatts in 2015 and more than 250 megawatts in 2016. With strong and growing demand for our panels and a stable pricing environment, our expansions team is highly motivated to meet or exceed these targets. Fab 4 will produce our most efficient solar cells to date, enabling panel cost reduction of up to 35%. As I mentioned in the last call, we’re also evaluating locations for our next significant capacity expansion and expect to make a decision on the additional capacity within the next few quarters. (Seeking Alpha)

 

Magical Merlin Delivering Cost Savings and Efficiency Improvement

 

Merlin 2 Merlin 1

GT’s Magnificent Merlin demonstrated a cell efficiency improvement of 0.7%, which doesn’t sound like a lot but it actually amounts to over a 4% PV module efficiency improvement (0.7% improvement divided by 17% base).   If you gave me a 4% raise in pay and told me that Merlin could reduce the effort (labor cost) it took to do my job by greater 10% I would be knocking on the door to sign up.  Merlin not only delivers an improved efficiency rating it also will contribute greater than a 10% reduction in the total system cost of solar.

SunPower is excited about their rooftop systems and global opportunity today, but what if  they added Merlin to their PV system lineup?   I can already envision the marketing message for potential customers….

 

SunPower’s PV systems manufactured coupled with GTAT’s Merlin Modules….

 

  • Dramatically reduces the total system cost by over 10%
  • Dramatically reduces the solar system weight
  • Dramatically reduces installation time
  • Dramatically improves the durability of the solar system
  • Dramatically reduces installation time
  • Dramatically reduced solar system weight allows for installation on nearly every rooftop
  • Dramatically improves our existing market leading PV efficiency %
  • Dramatically improved flexible design allows for new places to install solar modules

Drama is the first word in Dramatically.  However, unlike a play that is enacted on stage by actors for onlookers to enjoy, Magical Merlin’s mystical powers are real and Magnificent and will end up Multiplying  existing and creating new Market Opportunities out of thin air.  Just like magic!

 

Full Disclosure: I am long GTAT and have no plans to buy or sell any holdings