SunPower Corp., the U.S. solar panel- maker controlled by Total SA (FP), is strong enough to resist competition from Chinese manufacturers until the industry revives in 2014, an executive at the French oil company said.
This year and next “will be difficult, bumpy years, with lingering overcapacities and restructuring,” Arnaud Chaperon, head of electricity and new energy at Total, said today at a renewable energy conference in Paris. “The smallest players and those with lesser quality will fail.”
Total, Europe’s third-largest oil producer, paid $1.4 billion for a 60 percent stake in SunPower, whose shares have plunged 62 percent since April 29, the day after the deal was announced. In December Total agreed to raise its stake to 66 percent, contrasting with BP Plc’s decision to quit the solar business after 40 years because it had become unprofitable.
SunPower would be bankrupt without Total’s backing, Chief Executive Officer Christophe de Margerie said last month, pledging to turn the company around. Chaperon declined to say whether Total will write down SunPower assets.
The glut of photovoltaic panels that wiped $30 billion from solar stocks last year is likely to worsen in 2012, forcing manufacturers out of the industry, said Bloomberg New Energy Finance’s Chief Solar Analyst Jenny Chase.
Excess capacity cut the price of solar panels in half last year, depressing margins and prompting 15 of the 17 members of the Bloomberg Large Solar Index to post quarterly losses in their most recent earnings statements. The index lost 68 percent last year.
“This industry could continue to develop if costs are lowered and these costs have already dropped,” Yves-Louis Darricarrere, head of exploration and production at Total, said last month in an interview. SunPower is the “flagship” of the energy company’s renewable business, he said.
To contact the reporters on this story: Francois de Beaupuy in Paris at email@example.com