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DBL Investors News
Solar Panel Maker Solaria Bucks Trend, Plans Expansion With $30M
Dow Jones VentureWire
November 30, 2011
By Yuliya Chernova
Solaria Corp. is pushing ahead with $30 million in new financing and increased production of its solar panels, even as the solar manufacturing industry is experiencing some of the worst market conditions in its history.
Dan Shugar, chief executive of the Fremont, Calif.-based company, declined to name the investors in the Series E round.
"It was an increase in valuation from our Series D investment," said Shugar, referring to the round the company raised last year. A valuation increase is a notable achievement in the solar market, where shares of numerous publicly traded manufacturers are taking a beating.
Solaria has raised $162 million in equity since its founding from venture backers including CMEA Capital, DBL Investors, NGEN Partners and Sigma Partners. A representative of CMEA declined to comment, while other investors didn't respond to requests for comment. Nancy Pfund, managing partner at DBL Investors, declined to comment on the Series E round and whether her fund is participating.
The company has about 40 megawatts of production now with factories in California and India and will add 80 MW more next year. Its India factories are run by a third party in an outsourcing arrangement, Shugar said.
The expansion comes as several large solar manufacturers, including First Solar Inc., are putting expansion on hold, unsure about market demand.
"Why are we expanding? We have a much lower cost, we have sales orders with real companies, we need to scale up our manufacturing to build revenue and earnings," Shugar said.
Shugar said its capex costs are about 20 cents a watt, meaning that the additional capacity would cost about $16 million. The company buys ready cells and incorporates them into its own modules.
Shugar declined to say how the company will use the new funding and whether it has sufficient funds to complete the expansion.
"We are sold out," said Shugar, referring to orders for the company's panels. But some say that a sold-out status is not an indicator of much. In a buyers' market such as the solar market now, customers are usually able to renegotiate delivery amounts and price. Prices for solar panels have been falling drastically over the past two years. Shugar declined to discuss terms of Solaria's contracts.
"These are sophisticated buyers, installers, developers and financiers, and they are international," said Pfund, about Solaria's customers. "The company is experiencing very strong order growth."
The company's technology uses optics to receive 50% more output from a typical solar cell when incorporated into its module. The company received certification to sell the modules in the U.S. and Europe and has deployed them in 10 countries, including India. Pfund said that concentrating sunlight on photovoltaic cells, a technology called CPV, will emerge as a winner in the solar market.
Shugar, who previously was an executive at SunPower Corp. and its project development business Powerlight, said he's been through several cycles in the solar industry and that he thinks small businesses can survive competition.