Demand is increasing because the cost of power produced from solar systems has exceeded ‘plug parity’, let’s not even call it grid parity, noting of course that this varies by [market] segment. In mature markets like Japan and Australia, both commercial and residential, the cost of power from a rooftop solar system is less than what you buy from the outlet.
This is what will continue to increase demand. We are way below [parity] threshold, such that these polysilicon and shipping market shocks, even foreign currencies are everywhere, but I think the market demand is such that it can withstand these shocks very well.
You talk about socket parity, it sounds like the end user – the owner. As Maxeon is first and foremost a supplier of high efficiency products, how does that place you?
I think the way of thinking about the Maxeon portfolio is that we design products for each of the segments; residential, commercial and utility. The residential product is focused on our very high efficiency rear contact product. These buyers are more and more informed. There are scars that a lot of people carry, especially in Australia, from the 1kW incentive programs that resulted in rooftop products that really didn’t last very long. In contrast, our airframe architecture with the rear contact has a lifespan of 40 years, which actually exceeds our warranties.
In the commercial segment, we are playing with our P-Series product. This is a product that we manufacture from our joint venture in China that benefits from the use of mono-PERC cells. We know the costs of poly go up and down. In the past, we had the IBC product; we could not move [in price] with a large part of the market. But with the P-Series, we take advantage of these price advantages as the market changes. And the P series is also entering the utility market.
Conventional thinking is that SunPower is a high efficiency rear contact manufacturer – and that remains our flagship product. But now we have another product that has a slightly higher efficiency than the competition, but it has a cellular architecture that matches our brand, which is longevity. The cells are assembled without the metal contacts, which is the main point of failure in conventional PV, which allows us to offer an extended warranty.
So although IBC will be a key part of our product portfolio going forward, the portfolio is quite diverse as we have products designed for each segment.
But some residential rooftop projects also come with the P series. I have certainly seen this in Australia.
I talked about the portfolio across the segments, but we also have the portfolio that goes through the segment as well. For residential, for example, we have AC-PV, with our rear contact product, then AC-PV with our P series as well. There are also DC versions of these panels.
And the AC module is with Enphase microinverters, right?
It is a micro-inverter integrated PV module, with Enphase.
And the Maxeon Air module, which uses a polymer encapsulant rather than glass and an aluminum frame, was also launched. What is the progress of the deployment?
We’re going to be rolling out a few beta sites soon, but we haven’t quite hit the market yet. It is mainly aimed at the European market. If you think about the market segment we’re focusing on, it’s the older commercial roofs that were built a long time ago, long before we even thought of photovoltaics. This means that the roofs cannot support the load of a conventional photovoltaic system. The Air weighs less than half the weight of a conventional system and it also eliminates the need for a rack, so the system is non-penetrating. Our estimates are that there is an unserved market of 4 GW in Western Europe – so this is really where we are focusing.
The Air also helps with supply chain management. You can mount a huge number of modules on a pallet as they do not have a 40mm frame.
Is the Air module more expensive? I guess the polymer encapsulation is higher in terms of cost.
I haven’t seen the cost roadmap [for the Air]. But it’s more about how far below the LCOE socket it sits. There are a bit more costs because of the specialized materials, but people are always going to be ahead of the curve due to their energy costs being offset.
Upon entering the module, I read that the wafer used by the P series is the G12 [210 mm] slice. Is it correct?
We are at G12 now. There are G1 or 6 inch cells that are in our smaller product, but we are moving to 210mm cells [in the P-series] now. Large commercial rooftop projects and utility projects are already at 210mm now and we will soon have more products of this wafer size on the market.
Could IBC ever be scaled to G12?
We’re moving to bigger pad sizes on the rear contact product, but no, we’re not making as much of a jump as the 210mm represents. But the majority of the rear contact product is currently found on the 5-inch and M4 pads.
On your technological roadmap, there is the Max 6 and the Max 7. What role does the size of the pads have on this roadmap?
There are slight differences in the pads, but the biggest difference is what we do in terms of the production process and of course efficiency. We stopped producing the Max 2 this year and that was to ease the transition to the Max 6. The Max 6 has slightly higher efficiency and a slightly larger pad.
What we are also doing, and what we announced last quarter, we have improved some of the steps in the production process of our Max 7 platform, which is continuing. The Max 7 is really exciting because we come up with a cell efficiency of 26%. What we also do is we have a different metallization process which lowers the cost of the product. This is the double threat, greater efficiency at lower cost.
Is it electroplating for copper metallization?
Currently, our cells are copper based. But we’re evolving that into a different back contact process, which requires a few steps, which makes it cheaper.