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Sun Power Presentation

  1. 1. © 2011 SunPower Corporation © 2012 SunPower Corporation The State of LCPV Commercialization October 18th, 2012
  2. 2. 2 2 Safe Harbor Statement This presentation contains forward-looking statements within the meaning of the Private Securities litigation Reform Act of 1995. Forward-looking statements are statements that do not represent historical facts and may be based on underlying assumptions. SunPower uses words and phrases such as “driving,” “within reach,” “predictable,” “will,” “pipeline,” “visibility,” “goal,” “projected,” “target schedule” and similar words and phrases to identify forward-looking statements in this presentation, including forward-looking statements regarding: (a) plans and expectations regarding future financial results, operating results, liquidity, cash flows, capital expenditure and business strategies, (b) management’s plans and objectives for future operations, (c) reaching the goal of mass market cost-effectiveness and competing with conventional energy sources, (d) forecasted demand growth in the solar industry, and projected bookings and pipelines, (e) utility project construction and timing, completion, ability to obtain financing, (f) growth in dealer partners, (g) product development, advantages of new products, and competitive positioning, (h) manufacturing plans and expected savings, and (i) the success and benefits of joint ventures, acquisitions and partnerships. Such forward-looking statements are based on information available to SunPower as of the date of this presentation and involve a number of risks and uncertainties, some beyond SunPower’s control, that could cause actual results to differ materially from those anticipated by these forward-looking statements, including risks and uncertainties such as (i) increasing supply and competition in the industry and lower ASPs, impact on gross margins, and any revaluation of inventory as a result of decreasing ASP or reduced demand; (ii) the impact of regulatory changes and the continuation of governmental and related economic incentives promoting the use of solar power, and the impact of such changes on revenues, financial results; (iii) ability to meet cost reduction plans and reduce operating expenses; (iv) ability to obtain and maintain an adequate supply of raw materials, components, and solar panels, as well as the price paid for such items and third parties' willingness to renegotiate or cancel above market contracts; (v) general business and economic conditions, including seasonality of the solar industry, growth trends in the solar industry, and the challenges in becoming price competitive with conventional energy sources; (vi) ability to revise portfolio allocation geographically and across downstream channels to respond to regulatory changes; (vii) ability to increase or sustain growth rate; (viii) construction difficulties or potential delays, including obtaining land use rights, permits, license, other governmental approvals, and transmission access and upgrades, and any litigation relating thereto; (ix) timeline for revenue recognition and impact on operating results; (x) the significant investment required to construct power plants and the company's ability to sell or otherwise monetize power plants, including the company's success in completing the design, construction and maintenance of CVSR and the 711MW project for Southern California Edison; (xi) fluctuations and unpredictability in operating results; (xii) the availability of financing arrangements for the company's projects and the company's customers; (xiii) potential difficulties associated with operating the joint venture with AUO and ability to achieve the anticipated synergies with Tenesol; (xiv) success in achieving cost reduction, ability to remain competitive in product offering and obtain premium pricing; (xv) liquidity, substantial indebtedness, and ability to obtain additional financing and meet debt covenants; (xvi) manufacturing difficulties that could arise;(xvii) ability to achieve the expected benefits from relationship with Total; (xviii) the success of ongoing R&D efforts and the acceptance of new products and services, and ability to protect its IP; (xix) possible impairment or write-off of goodwill, intangible assets, long-lived assets and project assets; (xx) the success of residential lease program; (xxi) the assumptions and compliance with treasury grant guidance and timing and amount of cash grant; (xxii) the possible consolidation of AUO SunPower, and (xxiii) other risks described in SunPower’s Annual Report on Form 10-K for the year ended January 1, 2012 and Quarterly Report on Form 10-Q for the quarter end July 1, 2012 other filings with the Securities and Exchange Commission. These forward-looking statements should not be relied upon as representing SunPower’s views as of any subsequent date, and SunPower is under no obligation to, and expressly disclaims any responsibility to, update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
  3. 3. 3 SunPower 2012 3 World-leading solar conversion efficiency >2.5 GW solar PV deployed More than 200 patents 6,000+ employees Diversified portfolio: roofs to power plants Strategic investment by Total: #11, F500
  4. 4. 4 Total Overview:  11th largest company in the world*  2011 sales: €185 billion. 92,855 employees  Strategic investments in solar Transformational Investment, June 2011:  Long-term alignment with strategic investor who shares vision and strategy  $1 billion credit support agreement accelerates long-term growth plan  Expands SunPower’s R&D capacity through joint collaboration agreement  Total’s footprint spans 130 countries expanding SunPower’s market access Total SA Partnership * Source: 2011 Fortune Global 500
  5. 5. 5 Utility, IPP and Financial Customers and Partners >2,000 MW ground-mount power plants installed or under contract Total power plant pipeline of ~5,000 MW
  6. 6. 6 Current Oasis Power Plant Projects – 1.4GW+ Under Construction CVSR 315MWp MID 30MWp NRG Borrego 30MWp Under contract AVSP 745MWp Quinto 134MWp Henrietta 121 MWp Under Construction CVSR 315MWp MID 30MWp NRG Borrego 30MWp Under contract AVSP 745MWp Quinto 134MWp Henrietta 121 MWp
  7. 7. 7 SunPower & CPV SunPower was founded in 1985 to focus on CPV for utility scale PV The SunPower solar cell was designed for CPV
  8. 8. 8 SunPower C7 Tracker Key Features and Benefits:  Up to 20% lower LCOE than competing technologies for utility- scale solar power plants  High performance Maxeon® cell efficiency up to 24%  Based on more than 1,000 MW of tracking power plant experience  Rapid installation without specialized field labor  Modular solar cell receivers enable future plant performance upgrades C7 Tracker Profile
  9. 9. 9 The SunPower® C7 Tracker: Bankability from the Ground-up Standard SunPower solar cell with over 25 years of experience Standard SunPower solar cell with over 25 years of experience Glass mirrors with over 25 years of solar experience Glass mirrors with over 25 years of solar experience Single-axis tracker based on 1,000 MW installed base Single-axis tracker based on 1,000 MW installed base Advanced airflow management enables low operating temperature Advanced airflow management enables low operating temperature “Snap-in” mirrors and receivers enable easy replacement and performance upgrades “Snap-in” mirrors and receivers enable easy replacement and performance upgrades Simple optical system uses glass mirrors to focus 7 suns onto a SunPower high efficiency solar cell
  10. 10. 10 The SunPower Solar Cell – The World’s Best Silicon Concentrator Cell  The SunPower solar cell was designed from the beginning for CPV  The cell efficiency actually increases under concentration  High temperature performance is up to 6% higher than conventional PV  Under 7 suns the cell efficiency is 22.8% efficiency and the module delivers 20.1% C7 SunPower Cell Efficiency vs. Sunlight Intensity Gen 1 Gen 2 SunPower Back Contact Solar Cell
  11. 11. 11 Excellent C7 Performance vs. Modelled Output The performance of the Sandia C7 installation is at 100.7% of the PV Sim predicted value demonstrating excellent model fit 100.7% Annual Energy Production vs. PVSim Predicted 100.7% Annual Energy Production vs. PVSim Predicted
  12. 12. 12 Arizona State University / SRP – 1.1MWp  Salt River Project Utility (SRP) will buy Electricity through a PPA  Completion date December 2012  Located in Arizona State University , Mesa Arizona ASU/SRP 1.1MW System
  13. 13. 13 Tucson Electric Power – 7MWp  Location – Southern Arizona  7MWp / 6MW AC  4 x 1.5MW AC Oasis C7 Power Blocks  COD by Q4 2013  Utility owned and operated  2nd largest CPV system in the world TEP Oasis C7 Layout
  14. 14. LCPV vs. HCPV LCPV benefits: – More bankable – One-axis tracking - less complex mechanical system – Lower O&M – Future upgradeability – Rapidly scalable – Cost effective in wider range of DNI environments 14 C7 Tracker HCPV 3.7 meters 6‐17 meters 12 feet 20‐56 feet Concentration ratio 7 500‐800 Efficiency 20.1% 27/29% 5.2 acres 6.5 acres 2.1 hectares 2.6 hectares Tracker type 1‐axis 2‐axis Diffuse light capture 18% 0% AC Capacity Factor* 30% 33% Solar cell Silicon Triple junction MW of installed solar cells 2GW + < 20MW Solar cell experience 20+ years < 5 years Optics Glass mirrors Glass and plastic  compound optics O&M costs 85% 100% LCOE 80‐90% 100% *Approximate value for Phoenix, AZ Height Land required / MW
  15. 15. 15 LCPV Market Applicability Most existing and emerging power plant markets are in high DNI regions suitable for CPV:  Southwest USA  China  India  Saudi Arabia  South Africa  Chile
  16. 16. 16 LCPV vs. Commodity PV Modules The current market pricing of PV panels is unsustainable:  Selling prices below cash production costs  No margin to invest in R&D or factory improvements over time  Low factory utilization across the value chain  Cost reductions can be in tension with long-term module reliability (wafer thickness, materials selection, etc.)  Weak dollar and labour inflation may increase manufacturing costs  LCPV is LCOE competitive with low-cost commodity panels
  17. 17. 17 SunPower C7 - #1 for Solar Power Plant LCOE Source: SunPower Q1 2012 Earnings Presentation SunPower C7
  18. 18. © 2011 SunPower Corporation