“ECD fan” cannot be trusted right off the bat because: 1) No credible references are ever given to verify allegations for yourself and 2) The entity does not at least use its real name. It is not clear whether the UL listing disappeared after it was discontinued and the new product may not be the first UL approved solar shingle per se it seems to be the first standard shingle that integrates with normal asphalt shingles well. Google for yourself.

If the deterioration of adhesives were a widespread phenomenon versus an isolated incident you would be hearing more about it. The PV has a warranty.

By and large, despite the headwinds from the outside at least I think Mark Morelli has done a fine job transitioning the company from one focussed on R & D to one focussed on profitability, the attainment of which sent shares soaring on May 8th, 2008. It was always Stan’s vision to eventually make ECD an industrial powerhouse that would make clean energy and independence from foreign oil affordable on a mass scale, preventing environmental degradation and wars over oil. He’s both idealistic and practical. I have heard from former employees that some individuals took advantage of Stan’s great kindness and work environment that was meant to foster expressing creativity as opposed to hegemony where creativity of underlings is suppressed. If some the dead weight was let go it wasn’t necessarily a bad thing for shareholders. Nevertheless, it seems the R & D culture Stan (and Iris, let’s not forget her) cultivated was outstanding and worthy of emulation. Hopefully, once the company becomes sustainably profitable R & D can once again be funded to the same extent since that is the engine of innovative new products -and technology to manufacture them more efficiently, an important, practical focus Stan never lost sight of in realizing his vision. Most of what Morelli cut if I recall was things like the Ovonic cognitive computer that was seen as not being close enough to generating or improving profitable products in the near future even if these projects may have had long-term merit.

Now again there is some renewed emphasis on R & D to improve the efficiency of the laminates. In June a technology roadmap was presented detailing the strategy which has already begun to bear fruit. What ECD could advertise better is that their laminates perform relatively well when sunlight is at an angle at dawn or dusk as well as the better relative performance in high heat. The cited efficiency is with perpendicular rays under laboratory conditions including temperature. The company believes their proposed improvements will yield 20%+ efficiencies approaching grid parity in a few years.

I urge you to visit the ECD website and confirm what is alleged in the previous post. My understanding is that the new solar shingles are different. Notably, they are not the same as the version that required tedious individual wiring during installation which is now supposed to be far simpler. That was explicitly stated in one of the recent quarterly conference calls, and is likely the main point of doing away with the old non-standard SHR-17 shingle.

What is not immediately clear to me is exactly how well the Dow chemical shingle being tested now will stack up against ECD’s.

One thing I think ECD should be doing better regarding marketing is visibility to homeowners. While their rooftops are not large, they are many. SunPower has done a better job at being visible to homeowners. Akeena Solar’s products being sold at Lowe’s as a do-it-yourself installation is also a good move. Riding on the coattails of a highly visible player like Lowe’s would greatly help ECD in the residential market. ECD has improved its website, but could do better.

For those wondering what has taken place with the stock, here’s a synopsis: In 2008 they couldn’t make laminates fast enough. Demand was ample due to the commodities spike fueled by China’s expansion outpacing development of new reserves (which are getting more expensive nearing peak oil) that was self-perpetuating since oil speculation weakens the dollar which in turn makes oil more expensive. Natural gas and coal for electricity also spiked. Despite the efficiency issue, compared to polysilicon competitors ECD was well-positioned because polysilicon prices were high, but as with most commodities where supply can be ramped up eventually it was and this advantage was lost. When the credit crisis hit and construction of new roofs slowed, along with a plunge in energy prices with a strengthening dollar (much of their business is in Italy and France so not only does it dampen oil speculation but also makes the ECD’s products more expensive in foreign countries) as well as the rise of much cheaper thin films from chinese companies, ECD experienced a huge drop in demand. Many take-or-pay deals fell through, which had been priced into the stock. Some government solar incentives were lost in Europe, however mainly in countries served less by ECD, though this affecting the sector. A low Euro from sovereign debt worries doesn’t help. The timing could not have been worse because the company had just obtained financing, well-timed with regard to the stock price if I understand, to greatly expand operations to meet the 2008 demand. Inventory began to pile up. Morelli acted briskly though to cut costs to weather the storm and gave some attention to strategy including how they reach customers, acquiring SIT to become more vertically integrated being able to reach customers directly. Moreover he decided to focus on the niche where ECD is most competitive.

The debt is due in 2013. The stock remains below book value because if there isn’t a huge bump in sales it will be difficult to meet the obligations without diluting shares at least one analyst has commented. Potential tailwinds to save ECD from this would be an appreciation of the Yuan, which would make chinese solar prices less competitive, and a conflict between Iran and western powers that could elevate energy prices beyond 2008 levels as well as a gradual further global recovery that will also spike energy naturally because not enough investment has been made in new oil wells etc, during the slowdown to meet escalating demand from emerging BRIC economies, mainly India and China. Finally, phase change memory or PCM is poised to generate a new, material revenue stream independent of solar for ECD.

Two headwinds to consider are cheap electricity from shale gas and LNG making it a global commodity buffering against regional price fluctuations and skepticism about global warming after some fraudulent studies were exposed. Government debt problems and political opposition to spending in the U.S. and Europe may decrease subsidies, but the solar tax credit in the U.S. was renewed in the bailout bill in 2008 for 8 years. If, however, natural gas vehicles are used en masse before natural gas production can be ramped there could be periods of high prices, as could happen if electric cars are not charged overnight on smart meters. If hyperinflation occurs after this recession as some predict, energy will be expensive. Having your own source of electricity will become desirable in that scenario. Wind is only profitable when the price of natural gas is high and transmission infrastructure actually can get built, not to mention the fact that energy is lost in transmission unless superconducting cables are used with DC (no loss from resistance or induction). There is no such loss with rooftop solar and in the midst of a sudden energy crisis/commodity price spike individuals can install it rapidly, not having to wait for the FERC to approve transmission lines for wind.