By: Dylan Sikes - AllPennyStocks.com News

Wednesday, August 28, 2013

The solar sector can be as fickle as they come, with big moves up and down on global cues or successes of one company or another. There was a bit of a sector snap this month with some soft earnings reports and majors defaulting on bond payments. Despite the pullback, most solar players have registered strong gains in 2013. For example, SunPower Corp. (Nasdaq:SPWR), one of the biggest solar panel manufacturers in the world, may have missed a bond payment in March, but the stock is still ahead about 250 percent this year. Given the sometimes shakiness, companies that are diversified with their hand in solar and other technologies at the same time provide a hedge against some volatile swings while still positioning the company in a growing industry. Solar Thin Films, Inc. (Pink Sheets:SLTZ) fits this mold as, through its wholly-owned subsidiary Quality Resource Technologies (acquired in May), the company is developing businesses in Fiber Reinforced Plastics (FRP) shipping containers, FRP panels in housing, waste-to-energy and solar energy products.

Earlier this month, the company said it agreed to buy KLC Green Energy Corp., a firm that manufactures solar panel systems known as Smart Solar Tracking System, or the “Tracker,” for short. The Tracker increases the amount of energy produced as much as 50 percent by the panel shifting positions with the sun. Terms of the deal are supposed to be disclosed upon a definitive agreement, which is expected in the next few weeks.

The Tracker has made its way to the links, with the first installation of the system at Manhattan Woods, a PGA-authorized golf course in Pearl River, New York. The company says “the market opportunity for the Tracker is in excess of $100,000 at each of the 50-plus PGA-authorized golf courses in the USA over the next 2-3 years, plus the thousands of other application possibilities here and abroad.”

Solar Thin Films has also agreed in principle to design, supply and construct a 36,000 square-foot modular school and 8,000 square-foot clinic in Uganda, Africa. The company’s portion of the $15-million project is reportedly $10 million. The plans are to utilize Solar Thin Film’s Vulcan FRP panels in the modular construction, photovoltaic solar panels and battery storage for power and LED lighting products. Any excess power will be sold to the municipal power authority.

As with the agreement to acquire KLC, a finalized contract is expected within a few weeks.

Corporate technologies are being used to build the first “Eco-House” in Highland Park, New York, an area ravished by Hurricane Sandy. Employing “green” construction such as a full solar photovoltaic system for power, the dwelling is contracted to be built 7.5 feet above the ground and able to withstand 150 mph winds, including the windows.

On Wednesday, Solar Thin Films was making news again with announcing that it has penned an agreement to acquire Solar Portables Business, Inc., a manufacturer and installer of thin solar products. Terms weren’t disclosed, but Solar Thin Films said that they will acquire $4 million of work in progress and an additional $1 million in finished goods inventory as part of the deal.

Explaining the value of the acquisition, James Solano, chief executive at Solar Thin Films said, “First, it directly adds revenue to the Company this year from completion of work in progress, plus gives us a retail product line that should generate additional revenue opportunities next year. Second, the SPB product, which is the most advanced and approved technology available, will enhance the value of the fiber reinforced plastic shipping containers that we intend to manufacture for the Department of Defense and other customers because it will allow for the powering of tracking and locking systems used on the containers.”

The acquisition is expected to close in 30 to 45 days.

Also hanging in the balance is an agreement in principle with property owner Tri-State Wind Energy LLC, which contemplates three solar fields in West Virginia initially capable of producing 35 MW of electricity annually. The company anticipates $140 million in payments over the life of the projects.

Clearly, Solar Thin Films has tasked itself to develop an aggressive business model that looks to make vertical and horizontal penetration in several markets. Most of the deals need finalization, but investors may be well served to look for definitive agreements and see where it takes this young company. Proper due diligence is, as always, encouraged.

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