SunbitsSass Peress – CEO of ICP Solar – Solar Blog

Below is an excerpt of Obama’s speech with deals with clean energy. All I can say is…thank you BP. Perhaps now rather than treat your solar division as an afterthought, you might actually invest something in it…

“Each of us has a part to play in a new future that will benefit all of us. As we recover from this recession, the transition to clean energy has the potential to grow our economy and create millions of jobs -– but only if we accelerate that transition. Only if we seize the moment. And only if we rally together and act as one nation –- workers and entrepreneurs; scientists and citizens; the public and private sectors.
When I was a candidate for this office, I laid out a set of principles that would move our country towards energy independence. Last year, the House of Representatives acted on these principles by passing a strong and comprehensive energy and climate bill –- a bill that finally makes clean energy the profitable kind of energy for America’s businesses.

Now, there are costs associated with this transition. And there are some who believe that we can’t afford those costs right now. I say we can’t afford not to change how we produce and use energy -– because the long-term costs to our economy, our national security, and our environment are far greater.

So today news that Germany’s generous subsidies for solar are at risk because they are no longer supporting german jobs, rather mostly chinese jobs in the manufacturing of solar panels.

The fact is that subsidies will work…for a while…and only so long as you have a distinction which gives a value to your customers that others don’t. With China now making over 50% of the world’s solar panels, gone are the days where the German government (or any other for that matter) can be sure that the consumption subsidies will lead to jobs. Only by a superior product which the market demands, or quicker delivery which the market expects, can a company in Germany compete with the low labor realities across the world.

So as I like to say “the truth always comes out in the end”, its just that what one sees as “truth”, the other may not. Yet what is true in economic markets, is that the law of nature is as relevant there as anywhere. In a changing environment, you evolve or you die.

Stay tuned, its going to get more interesting if the German government takes that step. Fact is, I am not so sure that the industry, at near $1 per watt, needs the subsidies to promote jobs. I think that if the governments continue to stay focused, as hard as it is, on the savings in environmental cleanups that clean energy permits, then the business case still exists for subsidies. Its just that politicians like to have photo opportunities for their money, to show us they are spending us wisely, and standing somewhere in mid air pointing and saying “we subsidized this” is not as easy as planting a shovel in the ground and being photographed helping a new factory start up.

Stay tuned…

Sass

In all the huff about the economic crisis, people resort back to doing what is best for their wallets first, and secondly what is best for anything else. Its a normal reaction to the insecurity that such a situation can create. So the challenge in marketing products on the basis of “green” is greater in times when other things are primarily important, rather than in times of abundance where we “permit” ourselves to make investments we would otherwise refrain from.

I believe therefore that its our duty to show the consumer HOW buying “green” makes economic sense. Of course its hard to show them that the carbon savings resulting from their use of our sunsei(R) solar charger will results in a particular saving in cleaning up our environment (also at a later time) yet its important nevertheless to continue to market to forward thinkers, adjust your strategy and show savings of other kinds as well.

The convenience of solar can be promoted as saving time, and time is money. You’ll note that in such times, brands are important too, for their convey longevity. People will gravitate less to no-names or names they have never heard of, in favor of major brands they trust.

So it is not “bye bye” to buying green if you adjust your strategy to the reality of the people you are trying to attract. It will be if you don’t.

Sass

Big announcements of huge corporations getting into solar cell business. What does this mean?

It means that our industry is coming of age and that the same thing will happen in our area as happens everywhere else when a segment of business becomes more mature and shows its longevity…the sharks come in droves to take it up!

There could have been two kinds of sharks entering this business…the oil sharks or the electronics sharks. Well with Sanyo and Sharp already into it, now Taiwan Semicon and LG are jumping in. So where does this leave us? Well it simply improves the chances that we have cheaper and cheaper solar cells to choose from for our innovative products!

My father once told me, either you become a shark, or be happy to eat their crumbs, never taking their main meal away! So the crumbs will simply become more and more plentiful and ICP Solar’s Sunsei(R) and Coleman(R) brands will simply benefit from those price drops which make our solutions more accessible through greater affordability as a power option that consumers may consider.

Will they buy or build? Well that depends on what they prefer and their own corporate culture. There are indeed some cheap buys out there at the competitive level we are seeing with margin erosion, yet I wonder if they want to inherit the baggage that comes with the smaller buys, or simply build from scratch? My guess is they build their own, with their own IP, yet I can and are happily proven wrong if they choose to buy medium to large solar companies which are not quite well enough capitalized or have a position now which may become indefensible if they wait a couple more years.

Your guess is as good as mine. Care to comment? Please do!

Sass

Intersolar Trade Show in Germany has been a huge success for the industry…and for ICP Solar.

The trade fair was attended by tens of thousands of visitors and occupied 9 huge buildings in the new Munich Trade Fair Centre (aka “messe”). ICP Solar’s booth was busy at ALL times with the introduction of our patent-pending Greenmeter(R) solar/wind monitoring and metering system. Its our first dive into that area and already technology spinoff is occurring into other new products we will launch in 2010.

We showed no less than five new Sunsei(R) items, and each one of them hit the mark. I guess that’s what happens when you properly spend R&D monies, using proper product development processes which consult the customer!

So heading home today (the rest of the team is taking care of the last day of the fair) for a restful weekend with family before taking on another great week of new acomplishments.

Sass

The large Intersolar trade show occurs next week in Munich, Germany and for the first time in history, ICP Solar has its own booth to exhibit our Sunsei(R) solar products. We’ll give live demos of the Sunsei(R) Greenmeter(R) web based monitoring system and also some new solar panels adding to the line for 2010. Its an exciting time with lots of expected visitors and Munich is always a beautiful city to visit.

I see many new announcements of signed up deals. Not like in 2008, but more reasonable sized announcements that have a greater hope of fruition than many of the “pie in the sky” announcements we saw on an almost weekly basis last year. This is the sign of an industry which is maturing, that realizes that it is subject to the macro-economic realities just like any other industry and that it must govern and manage itself using the same principles of other industries.
Solar is an industry that goes up and down like any other. The differentiator is that it is an industry whose future is assured, simply not in the structure which it currently has. There will be continued announcements of closures (one company which we were going to purchase is in re-organization) and acquisitions, yet there will come a point where the scale of the big ones will mean that the only other models which work are not those based on economics of scale manufacturing capacity, rather on flexibility and intellectual asset values.
This is an exciting time in solar. Many new technologies are coming out, many are maturing. Each will find their place in the chase of clean energy and all make our world a better place for our children. After all…isn’t that what its really about?
Sass

BP has decided to stop making solar panels and simply “brand” and “innovate”.
I think that either you are a player with significant capital assets and research capacities, or you are a player with research capacities, or you are a me too player, in which you become a solar (or sun) farce rather than a force in this industry moving forward.
BP figured out it could not go head to head with the people building gigawatt plants or investing far more than what they want to in the game. They were too far behind and so now will simply make it a marketing exercise. Their brand is very powerful, they have good marketing people, and I think they will be very successful.
The people at the low end are being squeezed out as consumers demand innovation and quality. The
“me too” players who have not one iota of innovation are becoming the dinosaurs of our industry. The farce that they represented is almost dead. They have nowhere to go but to oblivion. BP chose to avoid that route by changing their strategy. Kudos to them. The challenge is, unless you are willing to invest, you will die. So either invest in capital assets or intellectual ones…that is the ultimate choice facing the solar industry players who wish to survive.
Sass

About a year and a half ago, you couldn’t look at Solarbuzz without reading weekly announcements of new production plans. Now, in 2009, its the reverse .
So what we are seeing is a reversing trend on capacity from some, while others are moving straight ahead with production plan increases. This should tell you who is going to lead and who is going to disappear. Changing business models is what this recession is all about. Its not just a worldwide issue, its also an industry based one. The solar model must change and we see evidence of that happening now.
Eventually, industry will understand that at the plant level, its about building plants or running plants (solar farms). Those who try to do both are chewing off a very big bite. Look at more mature industries and see how they do it, and mimic them..for that is the future of a young and dynamic one (solar).
Stay tuned, its getting like a daily event to watch the changes occur. I predict the market will come back in latter 2009 in a fierce way. The question is who is left standing to grab it…and who will be bought out at cheap prices. The big ones will only buy the smaller ones with unique market positions. The others will become distant memories….
Sass

The first real casualty on American soil, Optisolar, closing its doors with hundreds of employees let go. Owners sold their business to First Solar for shares (no cash) and now looking for someone to buy equipment of which there is already tons on the market available.
Its sad for those team members who hoped to build one of the largest solar parks ever. However, the park will go on…by First Solar. Again, we go back to the makers of cells/modules buying up the power utility providers thus creating an integrated business model similar to any utility. So who are the standard utilities biggest threats today…solar cell makers who go for the projects themselves. Now the game gets interesting because it will be battles of giants in that game, which is sure to drive costs down, which is sure to help make quality solar products more affordable.
Consumers are getting more demanding each day. In this recession, brands win because they have the customer’s confidence. Products which were once a force, are now a farce, because customers don’t trust them…and trust is of great importance as the stakes in the game increase. Who you buy your solar charger from is not quite as important as who you buy your electricity from, yet the concept is the same.
It just gets more interesting for me everyday now…and though I don’t hope for more closings, they are inevitable in this kind of industry (micro) and economies (macro) realities.
Sass