Solar Power Becomes a Market Reality in Japan and the United States in 2014: Ben Kallo, Robert W. Baird & Co.'s Senior Analyst Covering Energy Technology & Resource Management

Wall Street Transcript

67 WALL STREET, New York - February 27, 2014 - The Wall Street Transcript has just published its Alternative Energy & Utilities Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Outlook for Biofuels and Biochemicals - Asia Pacific Demand for Solar Energy - Grid Parity Timelines for Alternative Energy - Solar Energy Pricing - Government Subsidies and Regulation - Solar Growth Drivers and Headwinds - Regulatory Headwinds for U.S. Utilities

Companies include: Tesla (TSLA, Solar City (SCTY), NRG Energy, Inc. (NRG), First Solar, Inc. (FSLR), Total SA (TOT), EnerNOC, Inc. (ENOC) and many others.

In the following excerpt from the Alternative Energy & Utilities Report, an expert analyst discusses the outlook for the sector for investors:

TWST: You wrote that SunPower's end markets are becoming more diversified. What new markets are they getting into, and what are the implications of that for the company?

Mr. Kallo: So I think that's one thing that the overall solar market, I think one of the reasons that it performed so well in 2013 and I expect it to in 2014 is because a few years ago we were really dependent on a couple of markets, mostly European subsidy-driven markets. Over time, as costs have come down, new markets have opened up.

In 2013 we saw China become a very real market; we saw Japan become a very, very strong market. The United States is entering its stride that's about half of its utility-scale projects where these projects were started years ago, but the other half or the rooftop business, and that's helped by SunPower (SPWR) and SolarCity (SCTY), some of the private companies working on these leasing programs. So we don't have to worry about as much subsidy resets or changes in policy in one particular market.

And as this year progresses and we flip the calendar into next year and costs continue to come down and ecosystems develop in new regions, we'll start to have more gigawatt-type countries, whether it's Chile or parts of the Middle East or South Africa; it's coming. And you see that SunPower with the relationships with Total (TOT), I think, is best positioned to enter some of these markets.

Total is one of the largest integrated oil and gas companies. They operate in all of these different regions that will become very viable solar markets, so they'll help SunPower enter these regions in a cost-effective way. And we're seeing that in Chile where Total is doing a project that SunPower is building, Total will take part ownership. It's one of the first real projects of relatively large scale size around 80 megawatts and then also in South Africa. So I think there is more to come on that.

In the mean time, we've very viable markets in China and the U.S. and parts of Europe, in Japan. So that will become the bridge until we get cost down and the ecosystems can develop in some of these emerging regions that can be very big markets.

TWST: What is your outlook for consolidation in the energy technology sector?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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