The list of big names entering the solar industry with vigor just got bigger as Intel (INTC) spins off a stand-alone division called SpectraWatt. WSJ:
Intel Corp. disclosed that an internal team has been working on technology for use in solar panels, and it is being spun off to form a new company.
The chip maker said SpectraWatt Inc. will make photovoltaic cells, the primary component in panels that use sunlight to generate electricity…
Engineers in Intel’s new-business-initiatives group in Oregon have been working on the effort for several years, led by Andrew Wilson, who will become SpectraWatt’s chief executive. Mr. Wilson said the start-up’s goal is to reduce the cost and improve the power-generating efficiency of solar cells that are made from silicon.
SpectraWatt’s goal is average price parity in the U.S. in four years, he said…first product shipments expected by mid-2009.
With General Electrice (GE), Applied Materials (AMAT) and IBM (IBM) getting serious about solar as well, two questions stick out in our mind:
- As competition continues to heat up, how will early movers like First Solar (FSLR) handle it (and what will happen to the massive premiums in their stocks)?
- Do we have the makings of a bubble in the solar industry? Market cycles all follow the same pattern: extraordinary returns attract new capital and new competitors–which then reduces future returns. The valuations of First Solar, et al, aren’t insane, but they’re also very exposed to cyclical over-supply.
The key for the solar industry is price parity: once solar electricity costs the same as electricity produced from fossil fuels, demand will explode. Until then, the industry remains at risk, especially if oil prices drop.
First Solar (FSLR): Here’s Why Three of Those Concerns Are Overblown (FSLR)
Another Big Name (IBM) Crashes First Solar’s (FSLR) Party (IBM, FSLR, GE, AMAT)
General Electric (GE) Invading First Solar (FSLR) Turf, Buys Majority Stake In PrimeStar (GE, FSLR)