SunPower boasts of being able to manufacture the most efficient large-scale solar modules in the solar power industry. After starting off producing solar power products for installation on residential and commercial units, SunPower (SPWRA) has made a foray into large-scale utility power projects with its acquisition of PowerLight Corporation.
We believe that the residential & commercial components business will continue to be the biggest source of value for the company-- they're almost 43% of our $16.22 price estimate for SunPower's stock. This is because of the exponential growth expected in the company's shipments of components for residential & commercial use. SunPower's primary competitors include First Solar (FSLR), Suntech Power (STP), and Yingli Green Energy Holding Company.
Shipment Figures Have Grown Steadily ...
Shipments of residential and commercial components increased from 49 megawatts in 2007 to 288 MW in 2010. This increase has largely been due to various benefits and subsidies provided by governments for solar energy. SunPower's efforts in increasing its dealer network has also helped improve sales over the years.
... And the Growth Will Only Get Bigger
Environmental concerns and government subsidies continue to push the demand for solar systems higher.
The prohibitive initial cost of installing solar systems was the single biggest reason for the slow adoption of this renewable source of energy, which is being alleviated to a great extent by government policies to offer discounts on solar power adoption. To quote an example, Sen. Bernie Sanders (I-Vt.) submitted a bill to congress in February 2010 called the "10 Million Solar Roofs and 10 Million Gallons of Solar Hot Water Act." The bill would create tax rebates and incentives that would cover half the cost of new systems.
SunPower is also working directly with its dealer network and offering rebates to associated businesses and employees to promote the adoption of its components.
SunPower has been able to maintain a competitive edge by continuing to manufacture the most powerful and efficient solar cells in the world. All these efforts lead us to forecast a jump in the company's shipment figures, which we believe could reach almost 850 MW by the end of 2015.
See our complete analysis for SunPower's stock here
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