Expected Q1 loss does little to diminish SunPower's positive outlook

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Vertically integrated U.S. solar module manufacturer SunPower has posted "solid", if suppressed, revenue figures for Q1 2015 as the company readies itself for its first yieldco venture with fellow U.S. module producer First Solar.

SunPower’s first quarter GAAP revenue was $440.9 million, down from $692.4 million in Q1 2014 and significantly below the $1.164 billion achieved in Q4 last year. The expected loss of $9.6 million for the quarter – compared to a $65 million profit achieved at the beginning of 2014 – was little cause for concern among the company’s executives, with CEO Tom Werner stressing that unfinished and unsold projects still lingering on the books were retained for inclusion in the First Solar joint yieldco, which is a limited partnership between the two companies called 8point3 Energy Partners LP.

"Operationally, we have achieved record quarterly output at our cell manufacturing facilities in the first quarter and continued to execute against our long-term cost reduction roadmap," said Werner, adding that progress of the company’s next-gen cell technology at its new Fab 4 facility was coming along well, with 100,000 test cells produced that already surpass SunPower’s efficiency targets.

Werner also remarked that SunPower’s power plant segment was the main driver for Q1’s financial performance, citing the progress of the 579 MW Solar Star projects for Berkshire Hathaway Energy and Southern California Edison, with more than 500 MWac now connected to the U.S. grid.

"Construction of our 135 MW Quinto solar project is proceeding, and with expected completion scheduled in Q4, we plan to contribute this project to our proposed joint venture yieldco, currently in registration," Werner said.

Robust residential, growing global

Beyond the U.S., SunPower has continued to make inroads into some of the leading and emerging solar markets, not least with the 70 MW Salvador merchant power plant in Chile and the commencement of construction of a 86 MW solar project in South Africa.

"We also expanded our footprint in China with our announcement of our first international partnership with Apple, totaling 40 MW, in Sichuan Province," added Werner, who also remarked that SunPower has a "significant pipeline" in the world’s largest solar market.

In both the commercial and residential U.S. sectors, SunPower remains a key presence, signing a 68 MW 25-year PPA with Stanford University, while Japan’s residential PV market remains "a key contributor" to SunPower’s long-term value proposition, said Werner. Europe remains a stable residential market, the CEO added.

SunPower withheld fiscal year 2015 guidance in light of the ongoing discussions surrounding the creation of the yieldco with First Solar.

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