Over the years, we’ve watched SunPower spin out from Cypress Semiconductor to become a leading manufacturer of high efficiency solar cells and panels. Early in 2007, it purchased Powerlight, then one of the leading global providers of large-scale solar power systems. The combination of these two companies established a solid platform for the global scale necessary to provide end-to-end customer solutions. One year later we caught up with Julie Blunden, vice president of public policy and corporate communications (and former co-founder of Green Mountain Energy) to hear about how far things have come in a short time. 2007 results feature high profile implementations SunPower manufactures, designs, and delivers complete solar power solutions for residential, commercial, and power plant applications. This vertically-integrated approach encompasses the manufacture of solar cells and panels, which are then combined into integrated systems for installation as turnkey projects. In the United States, the company leads in all four segments of the market (from cells to systems) and has been very active internationally. In 2007, SunPower generated revenue of $775 million, which represents 220% year-over-year growth. According to CEO Tom Werner, the company is projecting revenue growth for 2008 to reach $1.2 to $1.3 billion. He further projects 2009 revenue to increase 40% to 50% from 2008 levels. Beyond the numbers, another indication of the company’s success is the range of high profile installations that have recently been completed. As widely reported, SunPower was selected to design and install solar electric power systems at 28 Macy's stores in California, totaling 8.9 megawatts. In addition, SunPower is assisting Macy’s to improve the energy efficiency at the stores. Combining solar power with energy efficiency will allow Macy’s to achieve an estimated 40% reduction in utility-provided energy, almost doubling the impact of the solar power alone. SunPower also announced the completion of North America’s largest solar photovoltaic system at Nellis Air Force Base. The 14 megawatt Nellis solar energy system will generate more than 30 million kilowatt-hours (kWh) of clean electricity annually and supply approximately 25% of the total power used at the base, where 12,000 people live and work. While these and other installations represent an innovative use of solar and tracking technology, the other key area for innovation involves the financing of solar installations, another area where SunPower has excelled. Financing is key to large solar projects The U.S. Air Force project at Nellis Air Force Base is representative of some of the funding and ownership intricacies that are common in the solar industry. For this project, MMA Renewable Ventures, LLC has financed and will operate the solar power plant, selling electricity to Nellis Air Force Base at a guaranteed fixed rate for the next 20 years. Nevada Power will support the project by purchasing renewable energy credits (RECs) generated by the solar array. To finance this undertaking, MMA Renewable Ventures closed a fund for the system with financing commitments from Citi, Allstate, and John Hancock Financial Services, with Merrill Lynch providing construction financing. If all of that sounds overly complicated, welcome to the world of commercial solar installations. SunPower understands these complex transactions and has been working with financial institutions to make project financing options easier for its customers. Last fall, the company signed an agreement with Morgan Stanley to provide the company with up to $190 million in financing for future commercial and public agency solar electric power installations. This “money first, project second” approach allows SunPower to go out and sign up clients with financing already “pre-approved.” Under the SunPower Access program, clients pay for the solar electricity generated rather than for the system itself by committing to a long-term power purchase agreement. More recently, the company signed an agreement with GE Energy Financial Services to provide financing for five California solar power projects. The projects include a system for ToyotaMotorSales’ Parts Center that will be the largest single-roof solar power installation in the United States. Under this agreement, GE Energy Financial Services acquired a majority equity interest in a set of projects which SunPower will design, build, operate and maintain. Solar power the HP way Another innovative project under the SunPower Access program is the installation of a one megawatt solar electric power system at Hewlett Packard’s printer manufacturing facility in San Diego. As with other projects of this scale, the HP solar electric system will be financed and owned by a third-party financier, which allows HP to take advantage of the environmental and financial benefits of solar with no upfront capital costs. The unique aspect of this deal is that HP will extend the benefits of solar power to its employees by creating a solar employee purchase program. Employees will receive a rebate of up to $2,000 from SunPower when using the SunPower Premier Dealer network for the installation of a solar power system for their homes. In addition, HP will match the SunPower rebate up to $2,000 per installation. As we wrapped up our conversation, Ms. Blunden noted that they were working with 7 of the top 10 home builders in California. Several had commented to her that in a down housing market a solar rooftop installation can provide differentiation, with some builders claiming that solar equipped homes are moving twice as fast as the market.
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