By Ernest Scheyder
NEW YORK | Fri Jun 3, 2011 1:40pm EDT
(Reuters) – Dow Chemical Co has delayed the launch of its Powerhouse solar shingle until the fourth quarter.
The new timing means the largest U.S. chemical maker will miss the 2011 summer construction season and have to wait until 2012 to see if the solar shingle, which is installed on roofs like ordinary shingles and can generate electricity from sunlight, will be popular with roofers.
Dow said last fall it expected the solar shingle to be available in some U.S. markets by the middle of 2011.
“Previously announced launch timing for the Powerhouse solar shingles represented early estimates which have continually been refined to reveal that fourth quarter is the best time for our market introduction,” Dow told Reuters on Friday.
Dow did not elaborate when asked what led to the new estimate, although anemic housing and employment markets have hampered the U.S. economy.
U.S. construction spending for April showed its biggest gain in six months, but the figure was still down 9.3 percent from a year ago, the U.S. Commerce Department said on Wednesday.
“Construction activity seasonally tends to be stronger in the warmer months,” said Hassan Ahmed, a chemical industry analyst with Alembic Global Advisors. “The profits that they could have made this year now will be deferred until 2012.”
Dow said last fall it expects $1 billion in solar shingle sales by 2015 in a roughly $5 billion market.
‘THESE GUYS WERE IN A RUSH’
The solar shingle is part of Dow’s long-planned transition from a large producer of commodity chemicals, which are made in large batches for slim profits, into a supplier of specialty chemicals and materials, which serve niche markets and have higher margins.
Dow’s shingles will use copper indium gallium diselenide solar modules, or CIGS, made by privately held Global Solar Energy Inc. Global Solar was not immediately available to comment.
CIGS cells typically are less efficient at turning sunlight into electricity than traditional polysilicon cells.
“Obviously the product is great. It makes sense in a high-energy price environment,” Ahmed said. “I think these guys were in a rush. They’re obviously very close to the finish line.”
Dow has declined to provide the per-unit cost for its shingle, which connects in series on a slanted roof and feeds direct current to a converter box to be turned into alternating current.
It could cost about $6,000 to install a solar shingle system that provides half of an average home’s power, Dow said. That figure takes into account a 30 percent federal tax solar rebate and local and state rebates, which widely vary.
The U.S. state of New Jersey, for instance, has a large solar subsidy program.
Dow is currently using a small test facility to produce some solar shingles. The company broke ground on a larger production facility on Wednesday near its Midland, Michigan, headquarters.
Dow had long planned to use the smaller facility to make the first batch of shingles for sale, then start to build the larger plant.
Last year Energy Conversion Devices became the first company to launch a solar shingle onto the market. Ascent Solar has developed a niche by selling flexible solar panels that can be used in tents and wrapped around poles.
Shares of Dow were down 1.2 percent at $35.32 in afternoon trading. The stock has traded between $22.43 and $42.23 in the past 52 weeks.
(Reporting by Ernest Scheyder; Editing by Lisa Von Ahn, Dave Zimmerman)