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Spire Corp. is using the slowdown in demand for photovoltaic systems to shake up its internal operations.
The Bedford company, which makes equipment used by solar panel makers, dissolved its two-year-old joint venture with Taiwanese PV module maker Gloria Solar Co. Ltd. last week and shifted its efforts into a new, wholly owned business, Spire Solar Systems. The unit will assume Gloria Spire’s strategy of marketing Spire’s PV systems integration services within the United States.
Spire executives see the U.S. market as ready for major growth in solar systems manufacturing as global demand for solar systems has been whipsawed by the financial crisis.
“Our view is, this is the place to be now,” said Spire CEO Roger Little. “If you look at what’s going on in the world, there’s overcapacity. But if you look at the U.S., there’s undercapacity.”
Establishment of Spire Solar Systems is the latest in a series of efforts the company has made to strengthen its internal operations to sell more products, including providing systems integration and turnkey manufacturing facilities to panel makers looking at building in America.
It announced a program to provide site selection and management of federal and state incentives for foreign solar cell manufacturers to take advantage of stimulus dollars. It also announced it is opening an advanced technology center at its headquarters to let customers test and train employees on the manufacturing systems.
The joint venture dissolution was also financially driven. Gloria Spire had been a drag on Spire’s ability to turn the corner after years of running in the red. Last year, the company grew revenue 85 percent to $68.7 million, despite a 63 percent drop in solar system sales, which are sold in part through the joint venture. Despite posting a $4.8 million profit for 2008, Spire had to deal with an $807,000 loss on the equity investment in the joint venture. In its annual report, the company said the joint venture’s significant losses were “due to its inability to generate revenue commensurable with operating expenses.”
Little said the Gloria Solar venture was formed when sales of solar systems integration services were very weak, and the Bedford company is now prepared to attack that market on its own.
“We were kind of hamstrung by the fact that our partner was Taiwanese,” he said. “Luckily for us, we were able to get out of the situation with minimal financial impact at a time when things are kind of slow.”
Spire owned 45 percent of the joint venture and Gloria Solar owned 55 percent, according to regulatory filings. The two will split Gloria Spire’s intellectual property, cash reserves and business leads, and Spire will take over the venture’s existing customer base.
Little admitted that the flurry of changes at Spire in recent months are an attempt to attack government stimulus funding opportunities in as many ways as possible.
“We have a lot of balls up in the air, and I just hope we catch a few of them,” he said.
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