Partly in a nod to our expectation of rising silver prices, we’re recommending an exciting small-cap solar energy company with outsized potential: Switzerland-based Meyer Burger Technology (Switzerland: MBTN) (OTC: MYBUF), explains Stephen Leeb of Real World Investing.
The company has superior technology that allows it to use less silver in its photovoltaic cells, conferring a significant cost advantage that will become increasingly important as silver prices rise.
Meyer Burger is currently in the midst of a company-transforming transition. Until now it has operated as a supplier of leading-edge manufacturing equipment and technologies to the solar industry, and in particular to China. But motivated by declining margins, it decided a better way to maximize the gains from its superior technology would be to become an integrated producer of solar modules.
It plans to start production in the next month or so of solar cells that in terms of cost per watt should set the standard. The company has a partnership with, and a significant stake in, a private company called Oxford PV.
A spin-off from Oxford University, this company is a leader in perovskite solar cells, a cheaper alternative to silicon, today’s standard material. By creating transparent perovskite cells, Oxford’s cells can sit on top of silicon.
Using perovskite in conjunction with other technologies, Meyer Burger is able to produce cells comparable in size to today’s silicon cells but much more efficient. They can convert additional wave lengths of sunlight into energy, generating more energy per cell area. The German-based Fraunhofer Institute has assessed the Meyer technology as up to three years ahead of standard technology.
A significant portion of the cost savings relates to silver. Meyer’s cells won’t need more silver than the comparably sized silicon-only cells — meaning the silver used will be more energy-efficient. The company’s ability to use silver more efficiently is a major reason we are recommending the stock.
By the end of this quarter Meyer Burger expects to be up and running, with initial production scheduled to reach 400 MW. By mid-decade, the company should be approaching production of 5 GW of cells and modules.
The largest cell and module producer in the U.S., SunPower (SPWR), produced about 2.5 gigs in 2019 and was valued at nearly $4.5 billion. Today Meyer’s valuation is a bit south of $1 billion, suggesting that this admittedly speculative stock has multifold potential.
It is widely agreed that solar represents the least expensive and most scalable renewable energy. Projections are that that photovoltaic installations will multiply by 20-fold between 2021 and 2030. Meyer is positioned to play a role in this tornado of a market.