CD firm Moser Baer makes a play for solar sales
Moser Baer of India aims to get 40% of its revenue from producing sun panels by 2010.
By Amy Yee, Financial Times, May 28, 2007
Source: Los Angeles Times
http://www.latimes.com/business/la-ft-solar28may28,1,4386266.story?
NEW DELHI — Moser Baer India transforms tons of tiny plastic particles into 3 billion blank compact discs and digital video discs each year in a factory in a Delhi suburb, claiming a 20% share of the global CD market. But with higher costs for raw materials and digital downloads raising questions about the future of discs, the company has found a new outlet for its expertise in stamping and coating: solar panel production.
Moser Baer now aims to generate 40% of its revenue from solar panels by 2010. It launched a solar panel factory last month that produces enough units in one year to generate 40 megawatts of power. The company plans to double the plant’s production capacity by year’s end.
Moser Baer generated $370 million in sales in the first nine months of fiscal 2007, up 27% from a year earlier.
Although India counts an average of 300 days of sun each year, the majority of Moser Baer’s solar panels are destined for export, mainly to Europe.
Solar power is thriving in Japan and Germany, where government subsidies have jump-started the market, as well as in the U.S. Spain, Portugal and other countries are latching on to solar as energy prices rise and concerns about global warming grow.
Moser Baer says it has booked a full year’s worth of orders from European utilities. The company estimates the global industry will grow sixfold to $40 billion by 2010.
Based on current demand, in the next few years “it does appear that the industry could easily grow 50% to 100% annually,” said Rajesh Khanna, managing director of Warburg Pincus.
Warburg, the largest private equity investor in India, holds about 33% of Moser Baer, which was set up in 1983 as a joint venture with Moser Baer Sumiswald of Switzerland.
Other investors are also betting on the power of the sun. International Finance Corp., the private-sector arm of the World Bank, recently announced a $22.5-million loan to Moser Baer for its solar business on top of its existing 9.8% stake in the company. British private equity firm Electra Partners has also invested in Moser Baer.
There are, however, significant obstacles to solar. Its expansion is hemmed in by solar’s relatively high generating cost of $4 to $5 per peak watt compared with less than $1 per peak watt for conventional power.
“If prices could decline to $1 to $2 per watt peak, then you’d see highly competitive pricing at the retail customer level. That’s been the holy grail of the solar industry,” said Dana Younger, head of IFC’s renewable energy infrastructure unit.
To narrow the gap, companies are trying to make panels more powerful and efficient. One possible solution is to increase the size of solar panels to capture more sunlight and make them more dense, said Ravi Khanna, chief executive of Moser Baer Photo Voltaic.
Moser Baer’s first solar panel factory produces conventional solar cells measuring 5 inches by 6 inches. Sixty cells are combined to make a module that can generate 200 watts as a free-standing installation that does not require linkage to an electricity grid.
But Moser Baer is looking beyond conventional small solar panels toward a new technology called “thin film” — enormous solar panels composed of a single sheet of glass that captures more sun and benefits from economies of scale. Most thin film panels are 1.2 square meters, but Moser Baer aims to produce units that are 5.7 square meters.
These large units could be suitable for commercial use at so-called solar farms and would have four times the electricity output of conventional thin film solar panels. “That’s when costs are going to come down,” Moser Baer’s Khanna said.