Maxeon Solar: Big U.S.-Focused Manufacturing Plans For This Global Solar Power Producer
With the turbulent security and supply of the fossil fuel market in 2022, green energy policies gaining momentum across the globe, alongside record-breaking heatwaves, forest fires and floods filling our daily newsfeed, these are all shining a light on the importance of the renewable energy sector. Experts expect the global solar market to reach more than double its capacity from 1 terawatt to 2.3 terawatts by 2025. One company contributing to gigawatt production across the globe is seemingly undervalued stock, Maxeon Solar Technologies, Ltd. ( NASDAQ:MAXN ). Albeit volatile, this small-cap stock at 842.237 million experienced a 119.79% increase in stock price over the last six months.
Although the company has mixed analyst reviews, it is not expected to reach profitability soon and has missed EPS expectations for the previous four consecutive quarters. I believe it has upside potential due to new legislations opening up market penetration opportunities, an upward growth performance in revenue and volume, a recent renewal of an exclusive contract to supply SunPower until October 2023 in the USA and Canada, strong strategic partner alliances with TZS and TotalEnergies. technology advancements driving down solar panel costs, new contracts adjusted for supply chain disruption costs and the plan to invest in a substantial multi-gig solar manufacturing facility in the USA. This mouthful of information makes me excited about MAXN and makes me believe that investors may want to take a bullish stance on this company.
The Climate Bill and its immediate impact
Renewable energy company stock have had a considerable boost this week with a landmark climate bill announcement which aims to dedicate 370 billion to clean climate initiatives in the States to reduce greenhouse gas emissions dramatically. Irrespective of your thoughts on the ambitious bill, it could spur significant market transformations. This Saturday, the legislation has successfully been voted in. One of the benefits for solar companies is that consumers with solar systems will receive a 30% tax credit. For MAXN, a global manufacturer and marketer of solar systems, the bill would support its growth plans in the States, including investment plans to build its first-ever solar manufacturing facility.
MAXN, located in Singapore, is a spin-off of SunPower (SPWR). The CEO, Jeff Waters, was previously part of SPWR. It became an independent public company in August 2020. The companies have several agreements which have created a framework for the relationship between the two. As seen in the table below MAXN focuses on producing solutions for two divisions, for residential rooftops (DG) and for its sizeable utility-scale power plant market. It manufactures SunPower branded solar panels for SunPower’s North American residential market.
It is one of the market leaders worldwide in manufacturing and marketing solar power solutions with over 35 years of experience. Today the company holds over 1300 patents and is known as a premium, high-quality company within the industry.
Technological innovation and investment drive its successful market growth and brand reputation. Furthermore, it has built strong strategic relationships with localised sales and distribution channels in over 100 countries with dealers, installers, distributors and white label partners. The company has over 930 sales and installation partners in EMEA, over 490 in the Asia Pacific region, and over 25 in Latin America. In the USA, it has an exclusive contract with SPWR to supply its residential products.
Solar manufacturing facilities are located in Malaysia and the Philippines, while solar assembly plants are based in France, Mexico and Malaysia. Furthermore, it has been utilising an assembly plant in China since 2017 through a joint venture with SunPower and TZS.
Up until now EMEA has been its biggest market, accounting for 43.8% of its 2021 fiscal year revenue, North America followed with 29.0% of revenue, and Asia Pacific accounted for 24.7%, lastly a small 2.5% is classified under other markets. The company has a goal to increase its direct engagement with the USA consumers, which is currently predominantly through SPWR.
The company’s technology is said to deliver 20% more energy than competitors since 2012, irrespective of roof space, and over a 25 year span. It has a leading 40 year warranty. Part of its success is investing 543 million in RD since 2007. In the graph below we can see the upgraded performance of its solutions.
Investing based on green legislation, market expansion and technological advances
As with my previous article on solar panel manufacturing competitor NOVA, MAXN does not look attractive on the financial front. In Q1 2022, we saw a negative and growing adjusted EBITDA, and operating income is decreasing per quarter, as seen on the graph below. The company aims to reach 12% adjusted EBITDA in 2023. There is confidence that the ramp-up of nearly completed investment projects and direct sales in the US market will boost growth.
Solar companies are very cost-heavy, requiring significant capital investments into manufacturing and assembly activities. If we look at capital expenditure over the years, we saw expenditure growing from 41.9 million in 2019, increasing by 286% to 154.2 million at fiscal year-end in 2021. Capital expenditure in Q1 2022 was 21.682 million. The spending is primarily related to expanding manufacturing and assembly capacity and improving technology. Operational cash flow, financing and additional forms of liquidity fund the activities mentioned above.
Furthermore, supply chain disruption heavily impacted costs for MAXN because of its fixed long-term contracts with customers and potential prospects. However, times are changing, and developers are starting to accept future cost index risk sharing on contracts.
We want to look at the capacity growth potential and market growth, and here we see some impressive numbers. Demand is soaring for solar, and the ability to match demand is part of MAXN’s growth plan. The residential rooftops (DG) is its largest division in terms of revenue, as seen in the graphs below.
Its residential (DG) division’s volume and revenue grew by 75% YoY from the previous Q1 2021 results. The DG market also has a positive gross margin. The expectation is for growth to increase with the new legislation easing market penetration in the States and improving customer payback periods. The US utility-scale is a new division for the company, and results are due in the upcoming Q2 2022 financial report. There have already been 700 megawatts of bookings for 2023.
The European and Australian markets are the front runners for MAXN, as seen in the graph below.
Although MAXN has a 35-year history in operations, it has only been an independent public company since August 2020. The company does not have a long history of financials to match its long history, and it has not yet released its Q2 2022 results. However, we can learn a lot from SunPower’s past performance. SunPower‘s Q2 2022 results show that there has been an agreement to supply a more significant number of solar solutions until year-end to meet consumer demand, which is a positive indication for growth in the US market. It is also benefiting from SunPower’s YoY market share in the USA since 2017, as seen below.
Today, its price to enterprise value to sales ratio 12-month trailing is 0.88, below the industry median. It has a negative profit margin of 32.7%, but the most sales growth has been 34.9%. The company will not be profitable in the next year. The company doesn’t pay any dividends, and analysts have mixed reviews about the future potential of this company. However, we cannot ignore the impressive upward trend over the last months. The one-year target price estimate on Yahoo Finance of 13.60 is 38.8% under the current stock price. However, we should be cautious of the volatile price history. Last year, February 2021 was as high as 50.17, and February 2022 was as low as 8.84.
SunPower and Maxeon extend module supply deal amidst soaring residential demand
SunPower has extended its supply agreement with solar technology company Maxeon until 2025 as it seeks to meet rising demand for residential solar in the US.
The extended agreement will see Maxeon supply its Maxeon 6 interdigitated back contact (IBC) panels – marketed in the US and Canada by SunPower as M-series – to SunPower’s operations in the US through 2025. Under the agreement SunPower will also have the right to negotiate for future IBC technologies developed by Maxeon.
Unlock unlimited access for 12 whole months of distinctive global analysis
Maxeon expects the agreement to enhance its growth and presence in the residential solar market. The company has just appointed a new CEO, Bill Mulligan, with the intention of building out its manufacturing base including a 3GW facility in the US.
“We are pleased to extend our relationship with SunPower, and our renewed supply agreement continues the exclusive supply of our industry-leading Maxeon 6 panels through SunPower’s very well-established channel into the residential markets across the US and Canada,” said interim CEO Mark Babcock.
“The high retail power seen in 2022, which look likely to continue into 2023, have created an environment where more and more consumers are realising the benefits of top-quality rooftop solar.”
Q3 2022 saw SunPower set a new record for customer additions, in the wake of which it announced discussions with other module suppliers as well as Maxeon to facilitate its expansion and meet growing demand in the market.
“This supply agreement solidifies our long-term relationship with Maxeon and further secures the supply of premium panels for our expanding customer base,” said Peter Faricy, SunPower CEO.
“Demand for solar continues to increase alongside the desire for clean, affordable and reliable energy, and SunPower is well positioned to capture this growth with trusted products and unmatched customer experience.”
The US rooftop solar market has indeed been growing of late, however some warning has been sounded by California’s controversial net metering decision which, in an effort to rapidly incentivise battery storage systems, may destabilise the largest residential solar market in the US.
Sunpower maxeon technology
SunPower and Maxeon solar panels outperform the majority of other solar panels currently on the market by 16.5% to 22.8%. energy is produced and saved when efficiency is high.
Fill in the contact form and our team will be in touch to answer all your questions.
Bullet proofed design, ahead of time technology.
Maxeon Solar Technologies, a global pioneer in solar innovation, is responsible for the design and production of SunPower solar technology. Maxeon is a spinoff of SunPower Corporation, which is based in the United States.
It was developed using 35 years of boundary-pushing solar DNA. Through a global sales network consisting of more than 1,200 sales and installation partners located all over the world, we sell solar products under the Maxeon and SunPower brands in more than 100 nations.
Maximum Lifetime Energy and Savings
SunPower Maxeon 3 solar panel is designed to deliver 35% more energy in the same space over 25 years.
A Better Product. A Better Warranty.
The 25-year SunPower Complete Confidence Panel Warranty.
Leadership in Sustainable Manufacturing
SunPower Maxeon panels—and the facilities in which they are produced—raise the bar for environmental and social responsibility.
How to Get SunPower Solar Panels Installed
SunPower only sells its panels through its in-house installers and its certified third-party installers. They aren’t available for purchase for DIY solar panel installations. You can follow the steps below to get a SunPower system installed on your home:
- Step 1 — Request a quote: Your first step will be to reach out to SunPower directly or a third-party installer to get a free quote for your system.
- Step 2 — Consultation and property inspection: After you request an estimate, a representative will speak with you about your energy needs and ask for a recent electric bill. They should also send a rep out to your home to conduct a property survey and take roof measurements. Your project will then go to the design team.
- Step 3 — Contract approval: After your system is designed, you’ll get a formal estimate and be asked to sign it to continue the process. Depending on your preferred payment method, you might also need to make a down payment.
- Step 4 — Permitting and planning: Next, your SunPower installer will pull permits for the system and ensure everything will be up to code.
- Step 5 — Installation: The next part of the process is the actual installation, which can usually be done in a day.
- Step 6 — Inspections and interconnection: In many cases, your utility provider will need to inspect your system before it’s connected to the grid. Once it is, your panels will produce power for your home, and you’ll start to see energy savings. Your installer will also schedule building department inspections to close out the permits.
- Step 7 — Solar monitoring: Finally, you’ll get access to the MySunPower mobile app to keep an eye on live-time production and panel performance.
SunPower has a large network of installers that is split into three categories: SunPower Authorized Dealers, SunPower Elite Dealers and SunPower Master Dealers.
There are hundreds of SunPower Authorized Dealers located throughout the country, with representation in all 50 states. Authorized Dealers are approved by SunPower to install its high-performance panels and go through special training to get authorization. These companies are also held to certain customer satisfaction and labor quality standards.
Elite Dealers complete advanced training programs through SunPower and meet even stricter standards when it comes to customer satisfaction and overall high-quality workmanship.
Master Dealers are hand-picked by SunPower to represent the brand. They uphold the highest standards set forth by the manufacturer.
As one of the biggest solar companies in the country, SunPower’s network of installers is unusually large. You can click the buttons below to get connected with approved installers in your area.
Customer Reviews of SunPower Solar Panels
SunPower’s commitment to quality products is evident in the A rating with the Better Business Bureau (BBB) and in the customer reviews for the panels themselves. Most customers rave about the customer service, and specifically the attention they receive in response to warranty claims and issues post-installation. It’s obvious that customers trust the manufacturer and are pleased with the panel performance.
Conventional panel manufacturers that don’t have as rigorous of an installer selection process don’t get the same reviews, although most negative reviews stem from a lack of service from the installer and not the manufacturer. Few customers complain about panels themselves, to be fair.
Positive Reviews of SunPower Solar Panels
The reviews we read through in which customers do mention the performance of their SunPower panels are overwhelmingly positive.
One complaint we often see about individual panel brands is less appealing performance and production than the customer expects. In many cases, this is the fault of the installer, as they are responsible for accurately representing expected production. Since SunPower manufactures the most efficient solar panels, and because the company vets its installation network, this is a rare occurrence among homeowners who get SunPower panels installed.
Most customers mention that they’re pleased with the production. We also see Комментарии и мнения владельцев about warranty coverage and the company’s willingness to fix issues if they do arise. Again, this is not always a reflection on SunPower panels alone but also on the installers with which the company works.
Overall, most solar customers seem to be pleased with SunPower panels and dealers, which is really saying something, given the company’s size.
Negative Reviews of SunPower Solar Panels
Thankfully, there are relatively few negative Комментарии и мнения владельцев about SunPower panels other than the fact that they’re quite expensive.
There are some instances in which homeowners don’t get the quality of service they expected, but these complaints are directed toward the installers and not the actual products. Still, it does suggest that SunPower isn’t always able to ensure its many authorized dealers uphold its in-house commitment to service. Your experience can vary based on where you live and which installer you choose.
This kind of complaint is very common among different manufacturers, so we don’t believe it’s indicative of an issue specifically with SunPower.
SunPower vs Other Solar Panel Manufacturers
Overall, we believe SunPower is the number one panel manufacturer in the industry. It uses cutting-edge technology to maximize panel production and efficiency and minimize degradation. Ultimately, this helps customers reach greater energy savings and allows them to install fewer panels on their homes, which is great news if you have limited roof space.
The table below includes some key specifications for SunPower panels as compared to panels from other manufacturers. This should help illustrate why SunPower is so highly rated and why we think it’s the best option overall.
Bottom Line: Would We Put SunPower Solar Panels On Our Roof?
Yes, absolutely. Overall, SunPower is the number one panel brand we recommend, and it’s the one we’d be most comfortable installing on our own homes. SunPower panels are the most efficient in the industry. They outperform most other brands in most areas, come with an industry-leading warranty and have one of the best reputations for quality and value available.
SunPower panels are more expensive than most other options, but we strongly believe the quality and high efficiency will lead to a lifetime of higher energy savings that will more than pay for the increased price you’ll pay. We suggest using the buttons below to get estimates from multiple SunPower installers to get the best upfront price possible.