SunPower going ‘on the offense’ in 2012, CEO says

Last year was a tough year for solar giant SunPower (s SPWR), despite that the company found a suitor in the French energy giant Total. But SunPower said on Thursday in its earnings call that it will be going on the offensive in 2012, aggressively selling solar projects and residential leases, and developing more efficient solar panels.

“We are in a position to be on the offense,” said Tom Werner, SunPower’s CEO, during a conference call with analysts to discuss the company’s earnings.

A big part of that offense will rely on major financial support from Total, which bought 66 percent of SunPower’s common shares over the past year and pledged to provide a line of credit, a 4-year R&D fund of $24 million, and other help to push SunPower’s project development business.

Werner called 2012 a “transitional year” for the solar industry. In 2011, a glut of solar panels caused prices to fall around 50 percent and contributed to a trade complaint against Chinese silicon solar cell and panel makers. The U.S. government is reviewing the complaint and considering whether to impose what could be hefty tariffs on Chinese imports.

The projects

The company’s solar project business in North America looks good, said Werner. The construction start of the 250 MW California Valley Solar Ranch project, which nabbed a $1.24 billion federal loan guarantee, will boost SunPower’s financial numbers.

Werner highlighted three contracts totaling 711 MW that the company signed to sell power to Southern California Edison, though SunPower isn’t scheduled to start delivering electricity until 2014. A more immediate deal involves shipping 54 MW of solar panels and related equipment for power plants to NRG Solar in 2011 and 2012.

No analysts on the call asked about the trade secret theft lawsuit that SunPower filed against SolarCity earlier this week, probably because SunPower executives weren’t likely to say much about it. But one analyst did ask SunPower to describe its program that offers leases to homeowners and how it compares with SolarCity’s. Leases allow homeowners to pay for the power produced by the solar panels monthly rather than the price of the solar energy equipment and installation. It’s becoming a popular way for consumers to avoid the expensive upfront cost of installing solar equipment and enjoy the promise of a smaller utility bill.

Werner and two other SunPower executives told the analysts that the lease program is a good fit because it rewards high energy production, and SunPower’s solar panels happen to be able to convert more sunlight into electricity than its rivals’. They added that SunPower has a big network of installers in which to market the leases, and its connection to Total means it can provide more competitive financing rates.

The numbers

SunPower reported $563.4 million in fourth quarter revenue, down nearly 40 percent from $937.1 million in the same quarter in 2010. It posted a net loss of $83.1 million, or $0.84 per share, compared with a net income of $152.3 million, or $1.44 per share from the year-ago quarter.

For 2011, SunPower generated $2.31 billion in revenue, up 4 percent from $2.22 billion in 2010. It recorded a net loss of $603.9 million, or $6.18 per share, whereas it posted $178.7 million, or $1.75 per share, in net income in 2010.

The company is expecting some improvements in sales for 2012. Revenues for the first quarter will likely reach $420 million to $495 million (its first-quarter in 2011 was $451.4 million). But it expects to post more losses: $0.20 to $0.05 per share.  For 2012, the company anticipates generating $2.6 billion to $3 billion in revenues.

Photo courtesy of SunPower