Break-up with REC points to deeper problems at Violet Power
By Johannes Bernreuter, Head of Bernreuter Research
The decision of U.S.-based polysilicon manufacturer REC Silicon to terminate the strategic partnership with Violet Power confirms doubts about the viability of the plans announced by the start-up for a solar panel production facility in Moses Lake in the U.S. state of Washington.
In a statement released on April 5, REC Silicon said it “believes it yields greater positive outcomes for its shareholders to collaborate commercially with established, proven, active and relevant solar supply chain partners to optimize the market opportunity for competitive, low-carbon locally produced solar panels.” In other words: The company does not regard Violet Power as such a partner.
REC Silicon’s move comes as no real surprise. At the presentation of the company’s fourth-quarter results on February 19, Violet Power was already missing on the presentation slides, contrary to REC’s second cooperation partner Group14. CEO Tore Torvund avoided answering an analyst question about Violet Power directly.
A red herring to hide Violet Power’s problems
In contrast to REC’s statement, Violet Power’s founder and Chairwoman Desari Strader claimed in the Columbia Basin Herald that it was her company that had terminated the partnership more than a week earlier “because REC has proven to be an unreliable business partner.” According to Strader, “REC cannot be a supplier of ours because they are not producing polysilicon in Moses Lake.”
That is pretty audacious chutzpah for a start-up company that has not delivered on its announcements. When REC Silicon and Violet Energy, Inc., which is doing business as Violet Power, announced their partnership in October 2020, it was already clear that REC would not restart polysilicon production in Moses Lake before mid-2022.
In mid-February 2021, Violet Power still told a participant of the Norwegian discussion forum on finansavisen.no the following: “At the moment, Violet Power and REC do not have any co-location or supply arrangements in place. Though we believe that REC could potentially be a great strategic partner, there are currently no plans in place.”
Strader’s finger-pointing to REC is obviously a clumsy attempt to divert attention from internal problems at her own company. Back in October 2020, Violet Power announced it would establish a high-efficiency solar cell and module production facility in a leased building across the street from REC Silicon’s mothballed polysilicon plant in Moses Lake. Production was planned to start with an initial capacity of 500 MW in the second quarter of 2021, to reach a capacity of 1 GW by 2022 and to expand to 5 GW within five years.
In early January 2021, however, the Columbia Basin Herald reported that Violet Power had changed course and envisaged the construction of a new factory building in an industrial park at the Port of Moses Lake. “We are planning on breaking ground at the end of January,” a company spokeswoman told the newspaper.
“The emperor has no clothes”
The announced groundbreaking has not occurred, though. A few weeks later, Violet Power’s Chief Technology Officer Markus Beck, a renowned expert in copper-indium-gallium-diselenide (CIGS) thin-film module technology, left the company after he had served there for five months. Since late March, Violet Power’s website has been protected by a password.
All these circumstances are no good signs for the future of the company. Bernreuter Research suspects that Violet Power has serious problems with raising funds for its ambitious plans. “The emperor has no clothes,” an observer says.
Violet Power’s CEO Charlie Gay, a solar industry veteran with over 45 years of experience, did not respond to our request for comment.
On April 8, PV Tech referred to a statement from Violet Power saying that the collapse of the strategic partnership with REC Silicon will “not affect in any way Violet Power’s plans for, or progress on, building out its manufacturing capacity in Moses Lake, Washington.” The company insists that it still plans to start production of interdigitated back-contact (IBC) cells and modules “at its existing 1.4 GW facility in 2021 with product availability for the US market by the end of 2021.”
Bernreuter Research is wondering where an “existing 1.4 GW facility” in Moses Lake should suddenly come from. Until proof of the contrary, we will regard the 1.4 GW factory as a Potemkin village.
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