Greenvolts Delay

Greentech Media posted an article about CPV player Greenvolts, noting that they are delaying their 2 MW plant until mid-2010 in order to continue "tinkering" on the project.  This highlights a number of interesting tidbits about the Company (i think) and the market. 

First, commentary on the company.  Kudos to them for holding off on the project if the technology is not ready.  There is a lot of complexity in CPV systems, especially when you're concentrating the sun 625x.   Similarly, not many CPV projects have been installed today, and installations at scale have been even more rare.  That means this install is going to be watched by every industry participant:  utilities, other CPV players, and PPAs (or what's left of them).  While a failed plant would not be a deal breaker for the whole industry, a high profile set back like this would not go unnoticed.

I think this delay is also affected by the market.  I'm guessing the system will likely cost in the neighborhood of $15-$20 million, using a cost basis of around $7/watt installed.  Even though they raised $30 million in equity capital about 6 months ago, it's unlikely they want (or are able) to burn 2/3 of their round putting in a pilot facility.  I have no idea what their burn rate is, but I imagine between operating costs and other capex, that round was not meant to support the 2MW plant. Given that they probably got their round done before any major compressions on valuation started to happen, insiders are unlikely to want to test the waters in the equity markets.  Debt markets being what they are, I think it would be a stretch to get project finance (especially w/o new equity commitments).

I expect similar announcements from emerging solar technologies throughout the remainder of 2009.  Hopefully the stimulus package will help, even if it only helps alleviate the tension on the debt markets.

GB

Photo courtesy of GreenVolts