Isra-Mart srl:SunPower inches solar costs closer to $1 per watt

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High-efficiency crystalline solar firm SunPower is on track to get the cost of solar power down to $1.08 (68p) per watt by the end of 2011, according to its chief executive.

Speaking at an earnings call for its third-quarter 2010 results late last week, chief executive Tom Werner said the company is 70 per cent booked for 2011 in its commercial business, 95 per cent booked for its utility and power plants business, and is sold out for the utility markets in Europe.

The firm, which purchased European solar power plant developer company SunRay for $296.1m in March this year, reported net income of $20.1m on revenue of $550.6m, up from net profit of $19.5m on revenue of $365.4m in the third quarter last year.

"On the cost side, we are on track to achieve our Q4 2011 plan of $1.08 per watt efficiency adjusted panel cost relative to conventional crystalline silicon technology," Werner said.

The firm's top three markets are Italy, the US and Germany, Werner said, both in terms of megawatts and revenue. "Utility and power plants revenue more than doubled in the third quarter to $261m compared to $128m in the second quarter of 2010," he said. "The strong performance was primarily driven by our successful execution in Italy and the build-out of projects in the US."

SunPower, which plays in both the residential and commercial markets, claims a 50 per cent higher efficiency for its solar panels than manufacturers of other crystalline solar panels, and 100 per cent more than thin-film solar manufacturers.

The strong performance exceeded analyst expectations and its share price climbed six per cent on the news to $15.01, although it has subsequently dropped back to $13.31.

The results formed the centrepiece of an eventful few days for the company, after chairman TJ Rodgers said he would step down from his position in a regulatory filing released on Tuesday.

The announcement prompted speculation that the resignation had been sparked by Rodgers' support for California's Proposition 23 ballot, which would have effectively suspended the state's climate change legislation, much of which benefits SunPower.

Writing in the Wall Street Journal last month, Rodgers said California's climate bill was a "job-killing tax".

While SunPower last week exceeded expectations, rival outfit Suntech Power Holdings Co Ltd saw its share price fall nine per cent yesterday as its third-quarter profits fell short of analyst predictions.

The China-based firm blamed high silicon wafer costs and reduced prices as third-quarter net income reached $33.1m or 18 cents per American depository share (ADS), short of analyst forcasts of 23 cents per ADS.

There was some good news for the company, however, as revenue climbed 57 per cent to $743.7m, exceeding expectations of $714m.