Inside the year’s 2nd largest solar round

This morning’s news of the $75 million Series C raised by Suniva was already notable, as it was the second largest venture capital round announced in the solar sector so far this year (see Suniva closes a whopping $75M Series C round).

But John Baumstark, CEO of the Atlanta, Ga.-based solar cell manufacturer, told the Cleantech Group today that the deal actually closed in the second quarter, making it solar’s biggest VC deal in the first half of the year. The news also gives a boost to the second quarter, which saw $114 million in announced deals for solar, the lowest level of funding in more than three years (see Cleantech may have seen the worst, rebounding to $1.2B in 2Q09). With the revised investment numbers, Suniva’s Series C round makes up nearly 40 percent of solar investment for the second quarter.

The only bigger VC deal in solar this year is the $77.6 million round announced by SolFocus in early July (see SolFocus closes $77.6M round, readies for manufacturing ramp). Still, both quarters are a far cry from the all-time high of $1.2 billion invested in the third quarter of 2008 (see Cleantech investment breaks all-time record).

Baumstark says Suniva is thriving while much of the industry is struggling because it offers the best of both schools of thought on solar: high efficiencies and low production costs.

Suniva’s Series C was led by first-time investor Warburg Pincus, a global private equity firm that has also put funds in Hamburg, Germany-based wind turbine generator manufacturer PowerWind; Thousand Oaks, Calif., energy crop company Ceres (see Water soaks up the cash); and Tucker, Ga.-based clean coal technology developer CoalTek (see Investors keep eyes on water filtration). Warburg Pincus also owns Competitive Power Ventures, the parent company of CPV Renewable Energy (see CPV buys wind turbines from Siemens).

Baumstark shared details of the deal with the Cleantech Group. Here are excerpts:

It’s been a tough year for solar, with investment in the second quarter at its lowest level in three years. How does your funding announcement fit in to that landscape?

I don’t think we’re included in that pot, but we raised the money and have been so busy that we’re just announcing it now.

So you actually raised the funds in the second quarter?

Yes.

Considering the landscape, why do you think your company was able to raise such a significant round?

Warburg Pincus is a very, very respected huge private equity firm with $30 billion under management, and they’ve looked at virtually the entire landscape. They found us to be differentiated. They saw a lot of ‘me too,’ but they didn’t see a lot of differentiation. …

When we went to the market, people looked at a company that had demonstrated execution and a track record, in addition to the Power Point slides that everyone else was pitching. We offer high efficiency at low cost, and [investors] believe it’s the place to be in the marketplace. The value intersection is really the key to addressing the market. Lower cost at the module level leads to a lower cost of electricity, and it helps the entire value chain.

What will the new funding be used for?

We’re investing in the business and people and tools that enable us to deliver the best product with the highest efficiency and lowest cost to our customers. We’re doing it with products made in the U.S.A., which really does matter, which really differentiates us, because not too many people manufacture solar in the U.S.

What do you want to accomplish with the money?

To expand production capacity, and also the team and staff to be closer to customers.

What geographies are you targeting?

The U.S. is clearly becoming a very large market, and the fact that we manufacture in the U.S. really matters to a number of customers. We’re well advantaged to take advantage of a market really starting to take off. Europe continues to be very large market. We don’t have anyone on the ground, but we do have customers there. Asia continues to be good market for us as well. We’ll look to grow there as well. We want to have good balance and representation across the globe.

What’s the current dollar-per watt selling price of your solar cells? Some analysts have speculated $6 per watt.

We don’t share those metrics. The $6, I’m not sure where that would come from. That would be very expensive, so it would have been hard to raise money if that were the case. Our objective is to get very high efficiencies and do it with low manufacturing costs through things like screen printing.

Do you have a cost-per-watt goal?

We are certainly working on some metrics, but those are not publicly disclosed.

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