7 April 2010


OPEL’s revenues shrink 60% in Q4/2009 while focusing on demonstration projects

OPEL International Inc of Shelton, CT, USA and Toronto, Ontario, Canada, which makes high-concentration photovoltaic (HCPV) panels (as well as both roof- and ground-based dual- and single-axis solar trackers for mounting them), says that its net loss increased from $1.9m in Q3 to $3m in Q4/2009, on revenue of just $61,730 (down 60% on Q3’s $156,000 and 93% on $939,440 a year ago). Full-year 2009 revenue was $608,000, down 60% on $1.5m in 2008 (when the firm transitioned from a development-stage company, after being founded in December 2000). Net loss almost doubled from 2008’s $5.1m to $9.8m in 2009. However, the balance sheet remains in a strong liquidity position, with no debt, stresses the firm.

The decline in revenue is attributed to the global economic downturn causing many planned funding sources for solar projects worldwide to be either suspended or cancelled, leading to a difficult environment to secure loans and credit lines. OPEL says that it recognized this environment towards the end of 2008 and hence implemented a strategy to preserve cash (a strategy that will continue into the foreseeable future). For example, in Q4/2009 OPEL started a small pre-production run of its Mk-I HCPV panels at a large contract manufacturer, allowing it to meet the volume required to fill its orders for 2010 delivery. The firm says that this strategy has allowed it to start to reduce the costs of its HCPV solar panels to ensure competitiveness as the market for larger HCPV projects starts up in late 2010 and 2011. The aim is to emerge from the downturn with a strong customer base and growing momentum.

So, despite the downturn, OPEL chose not to postpone its development programs and focused in Q3–Q4/2009 on installing 363kW of panels and dual-axis trackers at its 440kW utility-scale solar grid field at Vilalba del Arcs in the Tarragona region of northwestern Spain, as well as hosting potential customers there. This is the first project of the Betasol Energias Alternativas S.L. joint venture between Belgium-based subsidiary OPL Solar Europe SPRL (OSE) and Spanish solar integrator Fuerza Solar S.L., formed to install solar grid fields for sale to third-party power providers that can receive the Spanish Government solar feed-in tariff. The firm’s first fully operational solar grid field has allowed OPEL to demonstrate to potential customers the viability of its HCPV panels for generating solar electricity at utility-scale levels (e.g. proving their functionality and output compared to incumbent silicon-based solar panels). While 330kW was already connected to the grid and generating power by end 2009, revenue from Betasol (including about $1m from the 363kW installed in 2009) will be realized in 2010 once the full 440kW project is completed and sold to a third party. On 9 March, the Spanish Government awarded OPEL the feed-in tariff of 28.1 Euro-cents for 25 years on the Vilalba del Arcs installation. The existing 330kW plant is now being offered for sale. Commencement of the fourth and final 110kW section of the 440kW installation is awaiting customer funding.

In a second Betasol project, OPEL has also agreed to install a 2.375MW solar farm at a further location in Spain. A local Spanish bank has provided the $1.5m Aval (guarantee) for the project, which is due to begin installation in late 2010. The completed solar field will be sold to a third party that will provide electrical power to the Spanish grid.

OPEL adds that it is actively cultivating high-profile customers and projects in several European countries that have active feed-in tariffs. So far in 2010, OPEL and its installation partner Tecneira have been awarded a 1MW installation by the Portuguese Government. OPEL will use its HCPV panels and dual-axis trackers while Tecneira will handle the balance of the system installation (which will start in 2010 and end in 2011).

Also, in March 2009, OPEL completed Connecticut’s first rooftop tracker-mounted solar installation, a 131kW system at Linden Street School in Plainville, CT (now supplying a significant portion of the school’s electricity, and reckoned to eliminate 79 tons of carbon emissions over the next 20 years). OPEL retains ownership of the $1.1m system and will receive payment for electricity generated through a power purchase agreement (PPA) with the Plainville School System over the next 20 years. For the project, OPEL received a cash reimbursement of $526,500 from the Connecticut Clean Energy Fund and, as a part of the American Recovery & Reinvestment Act (stimulus package), received an additional cash payment, in lieu of a tax credit, from the US Federal Government for 30% of the net cost (amounting to about $179,000 in Q4/2009).

During 2009, OPEL also focused on forging relationships with large engineering, procurement and construction (EPC) companies and power producers. This has begun to pay off, says the firm, with an increase in quoting activity during the last two quarters along with orders for HCPV panels and tracker systems. Financing of solar projects is starting to pick up, and the US alternative energy stimulus package, individual State incentive programs, as well as the revised Ontario Standard Offer, will stimulate growth, it reckons. OPEL has worked to grow its customer base in all of these locations, which should yield projects from those relationships and continue to build its backlog of business for 2010 and 2011. “With our new relationships and increased opportunities in the marketplace, we are poised to expand prospective installation requests in 2010,” reckons chief financial officer Michael McCoy.

OPEL reiterates that it now has several significant orders on its backlog to deliver in 2010 and 2011, a fully commissioned solar installation in Spain with an approved tariff rate to be sold to a customer in 2010, and two new SBIR (Small Business Innovation Research) grants from the US Department of Defense to fund the activities of OPEL Defense Integrated Systems (ODIS) — including a $750,000 contract since 1 January to continue development of infrared sensor technologies for the US Air Force and the Space Missile Command — which collectively provide sufficient cash and revenue growth to support itself over the next 12 months and beyond, even if the economic down-turn should continue.

The firm adds that its current cash balances and other liquid resources are sufficient to fund expansion, inventory purchase commitments and research programs for the foreseeable future.

OPEL comments that, during 2010, it aims to: ramp up US production for its tracking system; identify a US-based contract manufacturer to its increase HCPV panel production capacity; establish dealer and representative networks in Mexico, Canada and the USA; and aid prospects for US solar legislation favoring HCPV incentives and other solar-related financial opportunities, such as feed-in tariffs or State and Federal grants.

See related item:

CPV panel maker OPEL rebounds in third-quarter 2009

Search: OPEL CPV