Uncategorized
Banking On Solar
Funny thing happened as I was searching the garage for our holiday decorations. I found an old box of miscellaneous electronic equipment, and stumbled upon an old Adelphia remote control. I remembered the massive debt that was missing from their financials, the convictions, the bankruptcy, and then “poof.” All at once my remote was old, outdated, and useless.
Here we are today, in the growing solar industry, still outrunning consolidation for the most part. But it’s coming… it always comes. For a market segment exploding like ours, there are just too many companies not making enough money. Or, ANY MONEY, for that matter. I read this today on SMA:
So they lowered their revenue estimates for next year by $100-$175 million Euros, and their expected LOSS increased by $70 MILLION EUROS to $115 MILLION EURO EXPECTED LOSS for 2014.
Okay, so SMA is the largest inverter company in the world, and they are losing a bunch. Let’s check out Enphase, the largest Micro Inverter company in the US.
http://finance.yahoo.com/q/is?s=ENPH+Income+Statement&annual
There is not a lot of good with them either. Their year ending 2013 showed a $26 Million dollar loss, which was an improvement from the prior 2 years. Wow. Maybe they will be better this year, although they now have competition in their market and have tremendous pricing pressure. Maybe not…
To be honest, the solar panel companies don’t look a whole lot better. But where do we go from here? So we are spending our time and money buying components from manufacturers that don’t make any money – it’s not our problem. After all, we are protected by their 10 year warranty, or in the case of Enphase, a 25 year warranty. Wait a second…
We are a wholesale company, and every minute of every day we are here to sell the public what they want. “Why would I buy that product with a 10 year warranty when I can get this one with a 25 year warranty?” we are asked. It’s a major factor, and we understand. However, we can’t help but notice that one company seems to be standing alone in this whirlwind of unprofitability and shrinking forecasts: ABB.
Understandably, ABB does a lot more than solar. But look at these financials:
ABB made a $2.8 BILLION dollar profit last year. PROFIT!!! That sounds like a company that is going to be around for the long-haul. Let’s do a quick recap of the three top inverter companies and their last reported years financials:
SMA: $115 Million Euro LOSS
ENPHASE: $26 Million LOSS
ABB: $2.8 Billion PROFIT
We know bankruptcy and consolidation is coming for many companies in our market. We should make sure we align with those whom are going to be around. By the way, I noticed yesterday that my Adelphia remote had the volume button pretty much worn off due to years of use. Can you imagine the trouble I would be in if I tried to get it fixed/ replaced?
