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Sustainable Energy is a leading developer and manufacturer of power conversion products for the renewable energy industry.
Message: September 30, 2008 Financial and Operating Results
| January 29, 2009 |
| Sustainable Energy Technologies Ltd.: September 30, 2008 Financial and Operating Results |
| CALGARY, ALBERTA--(Marketwire - Jan. 29, 2009) - Sustainable Energy Technologies Ltd. (TSX VENTURE:STG) ("Sustainable" or the "Company") yesterday reported its operating and financial results for the year ending September 30, 2008. The Consolidated Financial Statements and Management's Discussion and Analysis thereof can be found with the Company's public documents on SEDAR (www.sedar.com) and at the Company's website (www.sustainableenergy.com) under Investor/Financials/Fiscal 2008. Highlights - Massive new thin film PV production capacity coming on line in 2009 is driving down solar panel prices in all markets; lower prices will drive inverter sales growth in 2009 - 2012; estimated $5 B/yr market by 2012; - Sustainable's breakthrough "parallel" architecture enables lower cost thin film PV technologies to penetrate rooftop and building integrated solar applications; - Industry recognition of power of parallel architecture to increase yields and reduce system design and installation costs leads to demonstration trials with leading thin film PV panel manufacturers; - Gen II product line will be first to enable "parallel" architecture at industry's lowest cost/watt; product rollout scheduled for Q3 2009 for all major markets including Germany France Italy and the US; - Strategic partnerships negotiated in last 200 days to roll out parallel architecture for thin film PV in Spanish test market, generating revenues and demonstrating value proposition to the world; - Spain changes feed in tariff structure directing investment away from ground based system to rooftop and building integrated solar after September 30 2008; - Spanish solar products market stalls in Q2, 2008 pending policy changes; revenues down $480,134 from 2007 as a result; - 8 - 10 MW project pipeline with leading systems integrators in Greece will begin to generate product sales in 2009; nearly 2 year moratorium on feed in tariffs ends January 15, 2009; 2008 Operations Review During 2008, our resources were devoted to developing markets for our products, positioning our products and technologies for the emerging thin film PV capacity coming on line during 2009, and developing our second generation ("Gen II") product line which enable the parallel architecture for thin film PV systems. These efforts are paying dividends. In the past 200 days, we have - Entered into an agreement with Copcisa S.A., one of Spain's largest construction companies to develop and market thin film bundles consisting of PV modules our inverter and wiring harnesses to the Spanish building trades. The agreement contemplates an exclusive joint venture for Spain. - Entered into a co-marketing agreement with Solaer S.A., a leading project developer to roll out and demonstrate thin film PV to the Spanish market using our parallel architecture. The agreement is important in two respects: it is with our first customer validating our product; and it will give us hands on experience in installer preferences in this market - Scheduled trials to demonstrate the value proposition and secure endorsement of our platform for use with the leading thin film PV modules in the market. We have trials scheduled with PV module manufacturers and systems integrators in Germany, Spain, Greece, Canada and Taiwan. - Entered into a co-marketing agreement Ingeteam S.A. with one of the world's largest suppliers of solar inverters for thin film and solar concentrator applications; - Entered into a private labeling agreement Salicru S.A. with one of Europe's leading power electronics companies securing a lead order for Gen II units valued at approximately $6.2 million targeting the Spanish thin film rooftop market; and - Contracted with Salicru to outsource a customer service and product support base for Southern Europe. We have completed the first production prototypes for the Gen II version of our inverter and expect to begin the CE and UL permitting processes during fiscal Q2. We are targeting fiscal Q3 for trial production runs with commercial production by the end of fiscal Q3 2009 or early fiscal Q4. Gen II uses the same basic power electronics circuits and software platform proven in the SUNERGY 5 at a much lower cost, and with better performance and reliability. Our low voltage technology enables us to achieve what we believe will be among the lowest manufactured cost in the industry. Our product strategy is to outsource all manufacturing which is made possible because of the simplicity of the design and the modular platform approach. To our knowledge, we are the only company in the industry that outsources manufacturing. Our product design also enables a very low cost product support structure. Most of our selling activities were focused on Spain and Greece since the SUNERGY 5 product is not certified for sale in Germany, Italy or the US. During Q2, Spain announced a change its feed in tariff structure for projects completed after September 30, 2008 without specifying the new feed in tariff structure. The result was a virtual suspension of solar product sales (modules and inverters) for the balance of the year, except for sales to projects already in the pipeline for commissioning before September 30, 2008. At the same time, a government imposed moratorium on new solar projects in Greece had the same result with no product sales (modules and inverters) by any company including Sustainable in that market. Both situations have since changed to our benefit, but the result for Sustainable has been no sales in either of these markets since Q3, 2008 and revenues for the year were down $480,134 to $1,524,159 from $2,004,263 for 2007. Since the SUNERGY 5 inverter was not certified for sale in other markets we were unable to recover sales in other markets. Unlike the SUNERGY 5 inverter the new Gen II will be certified for all the world's major markets including the United States, Germany, France and Italy. As a result of the Greek and Spanish announcements, we slowed production of the SUNERGY 5 inverters, until the situation is resolved. By year end we had 1,079 finished units in inventory with manufactured costs ranging from C$1,971 to C$1,395. We estimate the market value of these units to be between C$2,250 and C$2,500 per unit. Spain has now revised its feed in tariff structure, signaling its intention that new investment in solar PV be directed to rooftop and building integrated systems, by changing the tariff structure to favor building based systems and allocating entitlements to the incentive pricing to such systems. The reduced tariffs have reduced investment yields dramatically, and the industry is turning to lower cost thin film PV in an attempt to increase yields. Greece has now lifted the moratorium confirming its tariff structure. We continued to invest time and resources to develop a marketing infrastructure in Greece and we have contracted with 4 different systems integrators for distribution of our products. For the most part these are for projects where crystalline modules are specified. Based on partner forecasts of permitted projects pending approval, we have an 8 - 10 MW sales pipeline in Greece, the timing of which remains unsettled pending the pre-authorization process. We have also begun developing similar sales partnerships in other countries in the region which have enacted feed in tariffs on entering the European Union and expected to see growth in sales from these markets during 2009. About Sustainable Energy: Based in Calgary, Canada, Sustainable (www.sustainableenergy.com) designs, manufactures and distributes power inverters for grid-connected solar PV systems. Advanced power inverters are a critical enabler of all modern solar PV power systems converting the direct current ("DC") power output of the solar PV modules into the high quality alternating current ("AC") power required by the power grid. Advanced power inverters also optimize the performance of the solar PV modules and maintain the integrity and safety of the interconnection with the power grid. Sustainable has developed and patented an inverter platform that is the first to enable a high efficiency "parallel" architecture for grid-connected solar PV systems at a cost per watt that the industry is looking for. A parallel architecture increases system yields by reducing the impact of partial shading on total system performance and eliminating mismatch losses from variances in orientation of the PV panels and from normal variances in manufacturing tolerances. A parallel architecture eliminates the need for complex string calculations and enables much higher penetration of the available rooftop area, thereby expanding the range of sites where solar PV is economic. Sustainable's inverter technologies are a breakthrough in inverter design and the subject of 9 patents issued by the US Patent Office with further patents pending. |
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