Natcore Technology Inc. (TSXV:NXT) is focused on developing next-generation solar cell technologies that could revolutionize the production of solar cells
SmallCapPower | April 27, 2018: Natcore Technology Inc. (TSXV:NXT) is a development-stage R&D company focused on developing two next-generation solar cell technologies, namely ‘Foil Cell technology’ and ‘Black Silicon’. Natcore’s flagship ‘Foil Cell’ technology replaces silver with aluminum that would drastically reduce production costs by up to 25% while improving the power output of solar cells by up to 25%. Given that competition in the solar-cell-manufacturing industry is intense, with players trying to achieve a mere 0.6% performance improvement per year to survive, Natcore’s technology could provide a generational leap in performance that would be most sought after by industry leaders.
Natcore Technology shares are up more than 60% over the past month and currently trade at $0.21. While Natcore Technology currently has no revenues, as the Company accelerates the prototype development and eventually commercializes its technologies, the potential for generating revenues is significant. Additionally, Natcore Technology could also generate significant revenues from its “Best of Breed” consulting program, with revenues from the 200 MW Vietnam project projected alone estimated at more than $20 million in the first year. Total revenues from other consulting projects as well as licensing and royalty revenues from the commercialization of Natcore Foil Cell could be much higher.
Investment thesis
- Focused on developing next generation solar cell technologies
- Attractive business model with multiple revenue streams from technology commercialization
- Best-of-Breed consulting program could generate significant revenues
Developing next generation solar cell technologies
Natcore Technology is focused on developing next-generation solar cell technologies that could revolutionize the production of solar cells. Natcore’s flagship ‘Foil Cell’ technology replaces silver with aluminum that would drastically reduce production costs by up to 25% while improving the power output of solar cells by up to 25%. Current solar cells consume 190mg of silver per cell for a cost of 10¢/cell. Replacing silver with 1.5gm of aluminum per cell would cost only ~ 0.2¢/cell. The Company’s ‘Black Silicon’ technology optimizes low solar cell reflectance. These technologies are secured by over 31 granted patents and 34 patent-pending applications.
New streamlined process and accelerated prototype production for Foil Cell technology: On March 15, 2018, Natcore announced streamlining the fabrication method for Natcore Foil Cell by eliminating the earlier laser processing and replacing it with a carrier-selective contact process, allowing for even lower-cost production methods. The Company also announced that it has started an accelerated development program to produce a prototype with the new process, as well as include production cost and efficiency modeling by independent authorities. The production of the prototype will help the Company commercialize its technology by partnering with industry leaders. On March 27, 2018, Natcore Technology further announced that it will be demonstrating its Natcore Foil Cell technology before a major global solar cell manufacturer soon.
Attractive business model with multiple revenue streams from technology commercialization
Once its technologies are commercialized, Natcore Technology expects to generate revenues from License Agreements, Equipment Sales, and Chemical and Material Sales. License agreements will be either exclusive or non-exclusive and will encompass royalty rights, enabling Natcore to benefit from residual income on each product that utilizes the Company’s technology. Equipment sales will be a royalty on equipment that Natcore Technology may sub-contract, including the equipment necessary to apply the black silicon process and selective contact process for the all back contact HIT cell. Natcore will generate recurring revenue by engaging third-parties to manufacture and ship the patented chemical mixtures and other materials for the various applications.
Multiple revenue streams
Best-of-Breed consulting program could generate significant revenues
Leveraging its knowledge of solar cells, Natcore Technology employs a “Best of Breed” business model to contract as a consultant for the design and construction of solar cells and panel fabrication facilities and solar farms. Since Natcore Technology does not manufacture components, it can select “Best of Breed” solar cells and modules that exist with current technology and as its proprietary technologies are commercialized, its partners could get exclusive access. The Company is currently working on four “Best of Breed” projects in Belize, Australia, Vietnam, and the Middle East.
Current consulting projects
Revenue generation from these projects are expected to be significant since it includes compensation on a “cost-plus” basis as well as unencumbered equity in the project. For example, on the Vietnam 200 MW project, the Company could receive $19.0 million initially along with an annual participation fee of $3.72 million for 20 years.
Projected revenues from Vietnamese Projects
Outlook and valuation
Natcore Technology shares are up more than 60% over the past month and currently trade at $0.21. As Natcore accelerates the prototype development and eventually commercializes its technologies, the potential for generating revenues is significant. Additionally, the Company could also generate significant revenues from its “Best of Breed” consulting program, with revenues from the 200 MW Vietnam project projected alone estimated at over $20 million in the first year. Total revenues from other consulting projects as well as licensing and royalty revenues from the commercialization of Natcore Foil Cell could be much higher. The commercialization of Natcore’s Foil Cell technology could act as a key catalyst to drive the stock higher in the near term.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
To read our full disclosure, please click on the button below:
