Energy Conversion Devices has just announced an increase in independent directors serving on its board from four to six through the appointments of Pasquale Pistorio and George A. Schreiber, Jr. That brings the total number of directors to eight.

This news follows their recent announcement of a narrowing Q4 loss which raised their stock price 15% on the same day.

The reality is that post-Enron, billion dollar companies must be perhaps more cautious than ever and the appointment of additional independent directors to keep an eye on things has to be welcomed.

Hoku Scientific, the first Hawaiian company to be listed on the Nasdaq, receives high praise indeed from Zack's Buy List, citing " . . . exceeded earnings estimates in four consecutive quarters and has reported a profit in six straight quarters. One analyst raised his numbers for this year. Over the past month, this year's estimates have increased 25%".

And yet, this company is 64% down on 1 year ago !

I've got my doubts about Hoku being a fuel cell developer and a solar business. Perhaps like many fuel cell companies, Hoku has just found it very tough to bring a product to market.

Renewable Energy Corp has just announced investment plans equal to $122m to quadruple solar cell production and to double solar module production over the next two years.

What really interests me about this is that they are not choosing to make this investment in a low cost Pacific Basin country, but aim to expand current facilities in Norway and Sweden - arguably two of the highest cost countries in the world to manufacture.

Perhaps that just goes to show, if you're in the high margin part of the value chain supplying a commodity in shortage of supply, you can get away with almost anything.

And still make a profit !

A good discussion piece here on Reuters about solar stocks.

I'm a bit disappointed though that the author merely mentioned a handful of american listed stocks, 1 German one and a few Japanese companies. This is a global industry with listed companies alll over the world.

And a quick look at altenergyinvestor.org tells you who they all are.

An excellent article here "Silicon shortage strikes industry" by Tom Abate which sums up the solar industry's conundrum in a mere 500 words.

I'll try and do it in a lot less;

i) Polysilicon shortage creating prices of $75 - $80 per kilo compared to $32, 3 years ago
ii) This hampering industry growth from 67% in 2004 to 30% in 2005 and to an estimated 10% in 2006
iii) This affects the solar industry but has a negligible effect on chipmakers
iv) Only a few companies make silicon; Hemlock Semiconductor Corp. in Michigan; Wacker Chemie AG in Germany; Tokuyama, Mitsubishi Materials and Sumitomo Titanium of Japan; and REC Group (you could also add MEMC)
v) Long lead-times and expense of bringing new silicon plant online

What the industry needs is an online silicon marketplace with futures contracts pricing out 10 years - it seems to be a very illiquid material and the spectre of “. . . solar procurement people traveling around the world with suitcases full of cash” is not a scaleable situation for an industry that likes to think it has the brightest future of all.

Spire Corp has just announced in quick succession two siginificant pieces of news;

i) A new product - a 100 MW turnkey solar module production line

ii) A contract for it's Bandwidth semiconductor subsidiary with Principia, worth over $16 m in revenues over 3 years

Some people might take the view that the solar boom is a new gold rush, so the best place to be invested is in the guys selling and making the shovels and shallow pans because the returns were - on average - higher and the risks much lower. It may be a crude analogy, but it's always worth looking at things in new ways. So translating this idea to Spire is worth some analysis. Spire does the "shovel production and distirbution" - selling solar manufacturing equipment, turnkey module manufacturing lines and turnkey cell and wafer production lines. It also does the relatively vanilla solar work - "gold-prospecting" - designing, manufacturing and integrating photovoltaic systems and modules.

Anyway the long and short of this is this;

if I was taking a bet on the best future returns in the solar industry, I'd rather be part of the former than the latter.

In this very interesting interview by Red Herring, Solarworld's CEO, Frank Asbeck was asked if there might be a crash in silicon prices, given that so many companies are now building extra capacity. This is something I've been banging on about in these pages for some time. His answer was very telling;

"Right now we have faith in scarcity. We will have that situation for at least three to five years. Silicon producers will grow with the market, and the market is boosting from maybe €8 billion in sales to far beyond €30 billion in 2010. We have high growth rates, but we still have enough space to grow. "

Also, have a look at this article here - Solar: 3 reasons for optimism which in some detail explains that an increase in government support, an easing of supply bottlenecks and growing demand means that the outlook for solar is still very bright indeed.

Plenty of people are waxing lyrical about the world's largest solar power plant just constructed in Germany by Solon and using Sunpower cells.

Actually, there are quite a few companies who have made a claim to the world's largest solar power plant . . .

This one in Portugal, when completed in January 2007, although a notionally lower capacity of 11 MW, will almost certainly have a higher load factor and produce more kilowatt hours in the Portuguese winter than in Bavaria.

Then there's Stirling Energy Systems plans for a MASSIVE 500 MW plant in California - announced with great fanfare last year, but we have heard little since.

Israel also has plans in place to build a 100 Mw plant in the desert - to be finished by 2012.

Solar power has until now proven very difficult to scale up to megawatt capacity. Most often the countries that could afford it, couldn't really spare usefully the large land requirements. It is only now that some of these barriers are starting to fall . . . expect plenty more world's largest solar plants in the next few years.

Norwegian Company, Renewable Energy Corp, is doubling its polysilicon production capacity to nearly 13,500 metric tons.

This follows from the construction on a $600 million production facility for solar-grade polysilicon in Moses Lake, Washington. It will add 6,500 tons per annum. Solar capacity is the chief asset of this company -they have more than anyone else, measured by tonnage, in the world.

I like Norway and the Norwegians. But I just can't figure out why a $7 billion Norwegian firm would want to list on the Oslo Stock Exchange and nowhere else !

I also think the name doesn't lend itself to brand recognition. In norwegian, "Renewable Energy" might not show up too much on www.google.no. But in english, any company name with "renewable energy" in the title runs the risk of being drowned out by everything else about it on the internet.

Consequently, in spite of REC being one of the world's largest alternative energy companies, viritually no one has ever heard of it. Meanwhile plenty of people have heard of say, China Biodiesel or Suntech Power Holdings because they have listed on the LSE or the NYSE and have names that say something specific about the company.