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SunPower CFO Weighs In On The Future Of Solar IPOs

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manny.jpgThe CFO of publicly traded solar company SunPower (SPWR), Manny Hernandez, says solar manufacturing companies looking to go public this year are in for a real challenge. “The field is getting pretty crowded,” he explained, referring to numerous Chinese solar companies like Trina Solar (TSL) and China Sunergy (CSUN) that have gone public in the last year or so.

In 2006, there was indeed an influx of solar manufacturing companies going public, with many of them competing in a race to the bottom on costs. Hernandez says that the challenge for solar companies this year will be in differentiation, be it in terms of cost, manufacturing technology, or service implementation.

SunPower went public at about the right time — November 2005 — when solar was getting a little more affordable and government subsidies were starting to look good. Hernandez actually joined the San Jose, Calif.-based company a few years ago to lead its IPO. At a lunch for the Western Association of Venture Capitalists on Thursday, Hernandez reflected on the move and laughed when he said, “In hindsight it was not a bad move at all,” — shares of the company opened at $28 when they started trading on Nov. 17 of 2005; they were changing hands for $74.68 midday Friday.

There’s one area of solar where Hernandez does expect to see IPO ambitions — thin-film solar. Thin-film solar is a type of photovoltaic technology that uses little or no silicon, and often can be printed on plastics or foils, which makes it possible to manufacture flexible solar cells.

“There’s a lot of companies looking to be like First Solar,” he said. First Solar (FSLR) develops thin-film solar technologies and went public at the end of 2006. Companies like Nanosolar, Miasole and Heliovolt have all been raising a lot of cash as they look to move into production.

But Hernandez also added that the cost advantage of thin-film solar — it keeps costs low because it uses little or no silicon — will be lost as soon as silicon is readily available again. He’s thinking that will happen sometime in 2008.