PHOTON International The Photovoltaic Magazine

ECD places hopes of curtailing losses on ramping up of PV sales

Despite continued losses, Energy Conversion Devices (ECD) hopes that increased PV sales through its subsidiary United Solar Ovonic LLC (Uni-Solar) can help the Michigan-based renewable energy company climb out of negative margins.

	© United Solar Ovonic LLC
During a conference call on results for the second quarter, ECD stated its business would be in good shape if it could ramp up to 16 MW of PV sales by increasing throughput on its 30 MW roll-to-roll thin-film machine. In 2003, ECD produced around 7 MW.

During a Feb. 18 conference call on results for the second quarter ended Dec. 31, ECD management stated its business would be in good shape if it could ramp up to 16 MW of PV sales by increasing throughput on its 30 MW roll-to-roll triple-junction thin-film machine. Robert Stempel, board chairman, who replaced company founder and president Stan Ovshinsky as CEO on Feb. 5, didn't say when ECD would reach that level. Although ECD did not respond to our solar cell survey (see PI 3/2004, p. 46), Uni-Solar president and COO Subhendu Guha told PHOTON International in early December that the company hoped to reach 7 MW of production by the end of 2003.

During the conference call, Ovshinsky, who has taken over as CTO, said he was combining work on increasing cell efficiency, which he put at 13 percent in laboratory results, with boosting throughput on the PV machine to bring efficiency to »an equivalent of 15 percent.« But the research is being done in »a separate chamber,« which Stempel says will be phased in »at the right time.« The company's commercially available solar modules have efficiencies ranging from 5.7 to 6.3 percent, depending on the order of the solar cells in the different module types.

ECD reported revenues of $15.7 million in the second quarter, compared to $18.5 million in the same quarter the year before. ECD attributed a net loss of $13.4 million – a 131 percent increase over a $5.8 million loss a year earlier – in part to its taking over all PV operations following the departure of former Belgian joint venture partner Bekaert Corp. in May 2003 (see PI 6/2003, p. 20). While operating losses at Uni-Solar increased to $2.2 million versus an income of $1.8 million in the same quarter a year ago, this was »partially offset,« says Stempel, by a $2.1 million reduction in operating losses in 2003 due to higher PV revenues.

»You can tell by our operating loss at Uni-Solar we're not exactly where we want to be yet,« Stempel reported, »but clearly we are headed the right way.« He said Uni-Solar sold 1 MW of PV in December, which is probably related to a deal announced on Feb. 18 for a 1 MW BIPV order placed by ThyssenKrupp Hoesch Bausysteme GmbH in Germany for integration into its roofing panels. According to the press release, 500 kW already had been shipped. The balance was expected to be delivered by April. An additional large-scale order for 1.25 MW ECD placed by German wholesaler Sunset Energietechnik GmbH. In the March 8 press release, ECD also stated that Sunset has signed a letter of intent to purchase 5 MW from the US company over the next 24 months.

ECD, which has raised $33.5 million in equity financing through the sale of new shares since November (see PI 1/2004, p. 27 and 2/2004, p. 20), was planning to seek investor support for an additional 20 million shares at ECD's annual meeting, which was scheduled for March 18. While ECD has »no present commitments,« said Stempel, it could be used for stock issuances if the company decides to set up new joint ventures, make strategic alliances, or increase equity financing. Stempel declined to comment on progress in refinancing Uni-Solar's 30 MW machine.

On Feb. 17, the day the second quarter results were published, the share price reached $8.40, closing at $8.26, up 10¢ from the previous trading day. On Feb. 18, the day the Thyssen deal was announced and the conference call was held, the price dropped to $8.13 per share. By April 2, it had improved to $10.63.