The sun is shining brightly on solar energy providers in California, and for companies like Goleta-based Solar 3D Inc (OTC: SLTD), a cocktail of encouraging news is driving up their value.
Shares of this penny stock have been rising sharply this month, climbing from three cents on January 7th to 11.5 cents yesterday for a 283 percent increase in less than three weeks.
It all happened on the back of three key developments affecting the company’s outlook for 2014 and beyond, starting with the imminent closure of an important cash-generating acquisition.
Acquiring Revenue Stream
The catalyst for the rise in Solar 3D’s stock came January 8th when the company announced the imminent closing of its acquisition of established solar energy provider Solar United Networks, Inc., (SUNworks) of Roseville, CA, by the end of this month.
One of California’s fastest growing solar energy providers, Sunworks generated over $7.5 million in revenues for 2013, with pre-tax profits surpassing $1 million for the year. It has delivered hundreds of 2.5 kilowatt to 1-megawatt commercial systems throughout California, and has the capability to deliver systems as large as 25 megawatts.
The acquisition will preserve Sunworks’ independence as a wholly-owned subsidiary of Solar 3D.
The steady stream of revenue from Sunworks is a sorely needed income stream for Solar 3D, which has been burning cash at the rate of $1.5 million per year for the past three years on the development of its new solar cell technology. That research is about to pay off.
Unique 3D Solar Cell Design
The second major development impacting Solar 3D’s recent rise in value comes from the nearly completed development of the company’s breakthrough technology which vastly improves the efficiency of solar cells.
The company’s patent pending 3-dimensional high efficiency solar cell design is capable of doubling the power output of conventional solar cells in use today while simultaneously reducing the cost of manufacture.
At least, that's what it says on paper.
The new technology boasts at least two major innovations over conventional solar cell technology:
• 3D surface grooves and angles: As the company explains on its website, “up to 30 percent of incident sunlight is currently reflected off the [flat] surface of conventional solar cells”.
Solar 3D’s technology solves the problem of reflection loss by cutting angled grooves or slots into the upper surface of the cell, trapping sunlight photons inside the cell until they are fully absorbed.
“Inspired by light management techniques used in fiber optic devices, our innovative solar cell technology utilizes a 3-dimensional design to trap sunlight inside a photovoltaic structure where photons bounce around until they are converted into electrons,” the company reveals.
You might think of it as tossing a marble at a flat surface compared to a surface lined with egg cartons. The pockets within the egg cartons will capture the marbles much more easily, with few if any marbles skimming off the surface.
• Multiple interior contact regions: According to Solar 3D, even more energy “is lost inside the solar cell materials” made chiefly of silicon. “Conventional solar cells have only one photon-absorbing surface”, forcing electrons to “travel a long distance before reaching a metal contact wire. As a result, they are reabsorbed by the material and do not contribute to the production of electrical current.”
Solar 3D’s technology reconfigures the interior of the cell by using multiple “very thin absorbing regions designed to enhance charge carrier separation”. Electrons now “travel short distances before reaching a contact wire where they will be quickly extracted to produce current. This approach also leads to an overall height and silicon material reduction when compared to conventional crystalline silicon cells.”
Since silicon is the single greatest cost in solar cell manufacture, any reduction in the amount of silicon used will greatly lower production costs, which until now have been the greatest single deterrent to their wider-spread use.
New California Law Helps the Cause
A third key development boosting the outlook for all solar energy providers in California is the recent passing of California Senate Bill 594 which makes it easier and cheaper for residents and businesses to earn credits by selling excess electricity from solar installations back to the grid.
Prior to the passing of SB 594, residents and businesses who earned credits by selling excess electricity from one solar installation could not apply those credits to the consumption of electricity at another building if the installations were on separate meters. In order to apply credits from one site to another, both sites needed to be connected to the same meter, which greatly increased the cost – especially when connecting multiple sites spread out over large distances across town or around the state.
With the passing of SB 594, residents and business can now earn credits from multiple solar installations and apply those credits to other sites even if they are on separate meters, greatly reducing costs and greatly increasing the viability of solar installations. And anything that makes solar installations more affordable will boost solar equipment providers like Solar 3D.
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A Winning Combination
Combining these three recent developments – a simpler law for transferring energy credits, a breakthrough new technology design, and the acquisition of an established cash flow generating business – will power Solar 3D’s business growth well into the future.
Solar 3D CEO Jim Nelson expressed his optimism in recent press releases:
“I believe that 2014 is going to be the year of Solar3D. With the acquisition and anticipated growth of Sunworks, we will enter the fastest growing part of the solar market in America -- solar systems sales and installation.”
"SUNworks has a proven record as a high quality solar systems provider and has a great opportunity to grow,” Nelson foresees. “With the passing of SB 594, the stars seem to be aligning to help accelerate the company's rapid increase in revenue.”
“Additionally, our proprietary solar cell team has made great strides in its third round of prototypes and we are in talks with two organizations that are focused specifically on helping us make the jump to commercialization,” the CEO announced proudly.
“We feel that we are on the verge of creating substantial value for our shareholders. On the technology development front, we are very excited about our prospects for achieving what Solar3D exists to accomplish - providing affordable solar power to people and organizations throughout the world.”
With its stock still in the low penny area, the risk to investors would certainly be a minimal one - a small price for a ticket to ride on the clean energy wave.