Major PV energy provider SunPower has said that demand for its PV modules exceeded supply and that its PV project pipeline has topped 7.5GW, boosted by around 300MW of secured projects through its majority shareholder, the oil giant Total.

SunPower noted that its project pipeline included 4GW in the Americas, 1.7GW in the MENA region, 1.45GW in the APAC region, notably Japan and China, and 500MW across Europe. SunPower’s project pipeline has increased by 1.5GW since May, 2013.

The company noted that its global distributed generation (DG) business deployments in the first quarter of 2014 totalled 108MW, which included 52MW in the APAC region, 35MW in North America and 21MW in Europe, and that demand continued to exceed supply.

The company also noted that it was establishing a 'hold co' and 'yield co' strategy in relation to both ground-mount projects and its distributed lease/finance residential rooftop businesses, with at least 517MW set to be included in its new asset pipeline through 2016.

Production capacity update

Having been capacity constrained for several quarters and running production lines at full utilisation, management said in an earnings call to discuss first quarter results that its 350MW Fab 4 construction in the Philippines remained on-track to produce 50-100MW in 2014 and 250MW in 2016.

Significantly, management noted that Fab 4 technology and processes would not only produce its highest cell efficiencies but would also enable module production costs to be reduced by up to 35%, without providing further details.

Capital expenditures in the second quarter of 2014 were expected to be in the range of US$30 million to US$40 million mainly related to the ramp in construction of Fab 4, according to the company.

Although the expectation in SunPower's pre-earnings call was that the company could announce its next gigawatt plus greenfield production site, management reiterated that it was still in site selection mode with a decision expected in the next few quarters.

"SunPower once again posted strong quarterly results, reflecting the power of our full value chain integration and diversified market footprint. We benefitted from strong demand in our distributed generation channels as well as solid execution in our global power plant business," said Tom Werner,SunPower president and CEO.

"Construction of our new 350MW solar cell manufacturing facility (Fab 4) is on track with first silicon expected early next year. This new capacity will allow us to address the growing demand for our high efficiency solar systems and will incorporate technology that further advances SunPower's performance advantage. A pre-production solar cell incorporating Fab 4 technology was recently measured at more than 25% efficiency by the National Renewable Energy Laboratory.

Financial results

SunPower reported first quarter 2014 GAAP revenue of US$692.4 million, up from US$638.1 million in the prior quarter. GAAP gross margin was 23.5%, up significantly from 20.5% in the fourth quarter of 2013. Net profit was US$65 million.

Shipments in the quarter were 327MW, down slightly from 333MW in the prior quarter, while production in the quarter was 306MW.

"We again exceeded our revenue and profit goals for the quarter as we benefitted from strong execution in all of our key markets," said Chuck Boynton, SunPower CFO. "Additionally, we strengthened our balance sheet as we successfully managed our working capital and cash balances. We were also pleased with our two new financings during the quarter. Our $250 million Google tax equity partnership supports the profitable growth of our lease business over the long term, while the Hannon Armstrong $42 million financing offers us a non-recourse debt structure that minimises interest rate risk, maximises the value of our existing lease assets and proves the high quality of our lease portfolio."

Guidance

SunPower guided second quarter shipments of between 275MW to 300MW on GAAP revenue of US$500 million to US$559 million.

However, the company raised full-year guidance on both shipments and revenue. Shipments in 2014 are expected to be in the range of 1.2GW to 1.3GW and GAAP revenue of US$2.55 billion to US$2.7 billion.