Very interesting — from a piece by Martin Roscheisen, CEO of Nanosolar (who to date have raised US$ 500 million in venture capital). Excerpts:
… poor manufacturing capital efficiency is really a very critical issue facing the solar industry and how this is what Nanosolar is seeking to change using simple printing processes, nanotechnology, and other forms of high-productivity technologies.
Then a solar investment boom set in, and, during the past few years, it seemed as if capital is free and the only thing that mattered is rapid production capacity expansion at no matter what capital expenditure. Petrodollars and overvalued public company dollars fueled the construction of factories with readily available but incredibly capital-inefficient manufacturing process technology, that is, production technology that delivers very little product revenue relative to the amount of capital investment necessary for building the factory capacity to produce the revenue-generating product.
The most egregious examples of this have been the production tooling capital expenditure (capex) necessary for wafered silicon cells as well as the high-vacuum thin-film cells from companies such as Applied Materials where the revenue to capex ratio is barely 75 cents on the dollar in a realistic pricing environment. This means that at any revenue growth faster than 20% per year, these companies are eternal black holes in terms of cash flow; whatever cash orbits their vicinity disappears in them and is never to be seen again.
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At Nanosolar, where we just recently have had our first profitable month (in good part due to frugal cost management), we are looking forward to demonstrating how fast growth and innovation in solar is possible in a sustainable, non-dilutive manner. [From Solar and the Credit Crisis]
I think this is very important, and was completely ignored by the media during the “solar bubble”. Read the whole thing.
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