UniSource Energy Looks to Sell Off Global Solar Unit
Aug 11 - The Arizona Daily Star Turning sunshine into revenue has been more difficult than expected for Global Solar Energy. The flexible solar material can be used to make backpacks that function as solar-power generators. That appeals to customers like the U.S. Army, which awarded a $1 million contract to Global Solar in June to help soldiers power electronic equipment in the field. But Global Solar is continuing to lose money. UniSource is now throwing in the towel and is actively seeking to sell Global Solar. "It's been a disappointment to me. It's never made sales goals. I've just run out of explanations," UniSource CEO Jim Pignatelli said Monday during an investor conference call. In 1996, Tucson Electric Power Co. made a $5 million investment to become a 50-50 partner in Global Solar with Denver-based ITN Energy Systems Inc. Since forming the partnership, TEP and UniSource Energy Corp., the utility's parent, have invested at least $70 million in Global Solar. Just in the last three years, Global Solar, now a wholly owned UniSource subsidiary, has lost $26 million. Revenues last year were only $9 million. UniSource expects to review initial bids for the firm by early next month. It is possible that existing management at the plant might make an offer for the company, which has a book value, according to UniSource, of about $20 million. Maurice E. May, a utility equity analyst for Power Insights in Westport, Mass., said shedding Global Solar and other nonregulated activities would be good for UniSource in the long term and allow the company to focus on its basic business of running utilities in Arizona. Hopefully this is not the end for Global Solar. In the past, technical problems plagued the company and hampered production of the thin-film copper indium gallium diselenide (CIGS) solar cells. The company reached reliable, commercial-scale production levels only about a year ago, said Michael DeConcini, UniSource senior vice president. But the product has promise for special applications and there could be demand on the consumer side for such applications as jackets that can recharge iPods and the like. DeConcini said a major selling point for Global Solar is the manufacturing plant and its 103 experienced employees. About half those jobs in manufacturing pay in the $10- to $12-an-hour range, DeConcini said, with the balance in engineering and administration averaging at least double that amount. "It's likely a buyer will want to capitalize on that plant," he said. UniSource believes in the solar technology, DeConcini said. "It has a lot of potential, but our shareholders are telling us these tech businesses are not what they are investing in," he said. UniSource may look forward to unloading its solar stepchild. But Tucson would benefit if it remains home to the plant and its skilled work force so that high-tech products remain in our economic quiver. Manufacturing jobs are too valuable to lose. A new owner might give the company what it needs -- focused management and new capital -- to make more products at lower prices. That would finally help the company, and Tucson, shine. ----- To see more of The Arizona Daily Star, or to subscribe to the newspaper, go to http://www.azstarnet.com. Copyright (c) 2005, The Arizona Daily Star, Tucson Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com. UNS, |