Maxeon Solar Shares Plans To Expand Further Into US Market

• Maxeon Solar will also supply its performance solar panels to SunPower expanding its current arrangement under which it already provides IBC panels
• The Singapore based company will also venture into US large scale solar segment through direct sales
• Manufacturing capacity expansion is also planned by the management under 2 phases of 1.8 GW each
• It is planning to set up a new module factory in the US as well
• In 2020, the company shipped over 2 GW of solar modules with total revenues adding up to $845 million

Maxeon Solar Technologies, Ltd. is expanding its existing solar module supply arrangement with SunPower Corporation to also include its performance solar panels for use in the latter's distributed generation (DG) business, with an aim to 'capture more of the available market'.

Under an existing exclusive DG supply agreement between the 2, Maxeon provides its 'sister' company SunPower  with its interdigitated back contact (IBC) panels that the latter deploys for the US rooftop DG market. It will now be expanded to also include performance line solar panels as a multi-year commitment.

At the same time, Maxeon plans to venture into large scale solar segment by exploring direct sales in the US, something that's 'not addressed by our current SunPower partnership', according to Maxeon CEO Jeff Waters.

"We are eager to expand our product portfolio by adding Maxeon's Performance line shingled panels to our premium IBC line," explained SunPower Corporation EVP, Norm Taffe. "Based on Maxeon's sales experience outside the US, we believe that this complete product portfolio will enable us to expand our share of account through our channel and penetrate new markets with a solar panel made at substantial scale in North America."

Maxeon Solar was born as a spin-off of US based SunPower's manufacturing business in August 2020 (see SunPower Officially Splits Into 2 Companies).

Manufacturing expansion plans

In a statement issued, Maxeon said it plans to implement its new performance line capacity in 2 phases targeting its existing facilities to quickly ramp 1.8 GW under phase I. Large format G12 mono-PERC solar cells, on wafers provided by its Chinese shareholder Zhonghuan Semiconductor, are planned to be manufactured at its Malaysian site while assembling is planned to be carried out at its facility in Mexicali, Mexico.

"In parallel, Maxeon will conduct a comprehensive process to select an optimal site for a U.S. based module assembly facility with a capacity of up to an additional 1.8 GW. Depending on site conditions and market demand, this second phase is expected to begin operation in 2023," announced the management. The Mexicali and US fabs will enable the company to stay closer to its customers, explained the management.

It further added that the new capacity will be used to manufacture its latest shingled bifacial panel technology with rated power of up to 650W per panel and more than 21% efficiency with which it will initially target utility scale solar plants and large C&I systems. Future plans include producing panels for DG applications in the residential and light commercial segments.

Recently Maxeon appointed Ralf Elias to lead its DG business as executive vice president and global head of distributed generation products (see Maxeon Solar Appoints Global Head For DG Products).

Financial results

Maxeon also announced financial results for 1^st full quarter as an independent public company for Q4/2020 and fiscal year ended January 3, 2021. It sold 655 MW solar modules in Q4/2020 that brought in revenues of $245.6 million and gross profit of $7.3 million.

For the year 2020, its total revenues added up to $845 million with gross profit of $-9.78 million. Its total shipments were 2.145 GW, the company shared.

Guidance

During Q1/2021, Maxeon said it expects to ship close to 375 MW solar modules bringing in revenues of approximately $160 million and gross profit in the range of $-5 million and $-15 million, factoring in out-of-market polysilicon cost of around $15 million. Management sees higher costs for raw material going forward well into H2/2021, including for glass, solar cells, freight and other items.

Operating expenses are guided to be around $38 million with capital expenditures adding up to $10 million as it upgrades manufacturing facilities.

For 2021, Maxeon has guided for its planned capital expenditures of $90 million to increase by another $80 million for the US focused performance line initiative, but subject to the company securing financing.

"Against a backdrop of strong and growing global distributed generation market demand, we are excited about the opportunity to expand and extend our leading go-to-market channel platform," added Waters. "In our large-scale business, we believe that the upstream supply chain disruptions will ease, although the exact timing is difficult to predict. We are well positioned to begin converting our 38 GW global sales pipeline into orders as this occurs."