Here’s a greener solution that’s taking off: Solar power.
ARISE Technologies’ (APV: TSX) share price took off a couple weeks ago in advance of several material press releases, including the recent announcement that the company has increased PV cell production plans by 56%, bolstered by increased production at its first ever, relatively brand spanking new production facility in Germany.
The company announced that it would increase PV cell production at the German plant to 560MW (annually) by 2012 from previous level of 360MW. This is due at least in part to the fact that the company will add a second production line at the facility by 2009.
Superior Canuck Silicon
As demand for clean energy continues to grow, pundits in the solar industry forecast millions of photovoltaic systems will soon dot the landscape, in deserts, on rooftops and elsewhere. A concurrent inability to meed demand for silicon used in the manufacture of photovoltaic cells threatens to stymie growth in the solar sector.
ARISE appears to be part of the solution: The company has announced that it expects to build a new high-purity silicon plant in Canada by 2011, ramping up to target output rate of 10,000 tonnes per year.
The company made this decision based on empirical evidence from its existing pilot production facility in Waterloo, Ontario.
Said Bart Tichelman, President and Chief Executive Officer, “We’ve based our decision on the quality of the silicon material being produced at the Waterloo SiRF operation, and so we have the confidence to proceed with planning for our first full-scale silicon production plant in Canada.”
The SiRF operation is essentially a miniature polysilicon production facility, and is financially supported by Sustainable Development Technology Canada (SDTC).
That government support underscores the fundamental promise of alternative energy projects like these—not only the solar sector, but also wind, geothermal and others.
Wired Magazine has reported the following about the growth of solar:
“According to a recent solar-energy report from the nonprofit Energy Foundation, the U.S. solar industry could grow by more than $6 billion per year if the technology becomes cost-competitive with electricity from fossil-fuel sources.”
Until ARISE has built its full scale plant, it will continue to produce at the mini-plant. It also plans to expand the capacity of its planned silicon pilot plant operation in Waterloo, Ontario initially to a target rate of 50 tonnes per year in 2009 and then to a target rate of 400 tonnes per year in 2010.
To help put that into perspective, the price of silicon has more than doubled in the past year, according to Heinz Schimmelbusch, chairman and chief executive of Timminco (TSX: TIM), a specialty metals company based out of Toronto. More on that in a minute.
Outlook:
This is a company who’s sun is just rising. As such, ARISE is presently losing money at a significant rate.
But news from the company indicates that the bleeding may soon be over. 2007 revenues doubled over 2006 figures to $1.162 million, up 59.2 percent from $0.7 million in 2006. This was due to the company’s Systems Division, which implements solar panels into the existing grid in Ontario.
In late March, the company announced that it now has firm agreements with six wafer suppliers that will meet approximately 80 percent of its expected 2008 production requirements. The company also confirmed that the start-up of its first production line at its new plant (Windsor) was on schedule and that it expects to have Line 2 in production in the 2009 first quarter.
Arise also has “signed letters of intent for solar farms in Ontario that, if completed, will require installing 44MW of PV systems over the next two to three years in six projects.”
I also like that Arise has real projects providing visible solutions, including Canada’s first solar community – 14 homes outfitted with solar panels. Government of Canada stated, “The aim of the project is to accelerate the acceptance of PV technologies in the market and to develop a framework for expanding the program to other regions of Canada.”
It doesn’t get much clearer than that.
ARISE also teamed up with U of T and Partlands Energy Centre to create “Canada’s Largest Solar Research Facility”. According to Ontario’s energy minister, the project will “will establish Toronto and Ontario as a world leader in solar energy research and development.”
Better than that, it’ll power up to 1,000 homes.
We don’t have room here to do a full revenue growth forecast, but these details do offer some insight. Additionally, with silicon at $1.80 pound and plans for a 10,000 tonne silicon production plant, the company could generate an additional $40MM just from silicon (by 2011), not to mention its end-product line of photovoltaic cells, or an additional $2.50 per share in future value, however speculative those figures may be.
