Resources for Solar Stocks Investors
News and Research on Solar Stocks
Hoku Scientific, Inc., a materials science company, provides materials and components for the generation of electricity from clean energy technologies, including solar power systems, polysilicon, a primary raw material used to manufacture solar, or PV, modules, and membranes and MEAs for proton exchange membrane, or PEM fuel cells.
The company organized its business into three business units: Hoku Materials, Hoku Solar and Hoku Fuel Cells. The company’s wholly owned subsidiaries Hoku Materials, Inc. and Hoku Solar, Inc. operate its polysilicon and solar businesses, respectively.
Hoku Materials
The company incorporated Hoku Materials to manufacture polysilicon, a key material used in PV modules. It had originally planned to use the polysilicon internally by Hoku Solar to manufacture its own brand of solar modules, and for sale to the maor solar market.
In March 2007, the company entered into a 99-year ground lease with the City of Pocatello, Idaho, for approximately 67 acres of land. It commenced construction in May 2007.
In January 2007, the company entered into an agreement with Sanyo Electric Company, Ltd., or Sanyo, to provide Sanyo with polysilicon sales.
In June 2007, the company entered into an agreement with Suntech Power Holdings Co., Ltd., or Suntech, to provide Suntech with polysilicon.
In June 2007, the company entered into an agreement with Global Expertise Wafer Division, or GEWD, a wholly-owned subsidiary of Solar-Fabrik AG, to provide GEWD with polysilicon sales.
Planned PV Products
In October 2006, the company entered into an agreement with Spire Corporation, a U.S. solar equipment manufacturer, for the purchase of PV module equipment and technical support. The equipment would have enabled it to manufacture up to 15 MW of PV modules each year. In October 2006, the company also entered into a contract to purchase solar cells manufactured in Taiwan from E-Ton Solar Tech Co., Ltd., which it had planned to use in its brand of PV modules.
Hoku Solar
The company incorporated Hoku Solar to assemble and install its own brand of PV modules.
In December 2006, the company became a licensed electrical contractor in the State of Hawaii, and plan to install solar modules in Hawaii. In May 2007, Hawaiian Electric Company selected the company to enter into negotiations for the installation of a 167 kilowatt, or kW, solar system and its sale to Hawaiian Electric Company of the power generated by that system approximately a 20-year period.
Hoku Fuel Cells
The company operates its fuel cell business under the name Hoku Fuel Cells. The company has designed, developed and manufactured MEAs and membranes for proton exchange membrane, or PEM, fuel cells. It has developed custom monomers and polymers for its Hoku Membranes—the core technologies of its Hoku MEAs. MEAs are an integral component of PEM fuel cells.
The company’s Hoku MEA products can be manufactured in three, five or seven layers. In these products, the catalyst is applied directly to its Hoku Membrane. The company can also manufacture a seven-layer Hoku MEA, where an integrated seal or gasket is included on each side of the five-layer Hoku MEA. Hoku MEAs have been initially designed for applications in the stationary and automotive markets. Hoku Membranes.
The key component of the company’s Hoku MEA is its Hoku Membrane, which is a PEM made from one of its hydrocarbon-based polymers. The company’s primary focus is developing non-fluorinated polymers for its Hoku Membranes. It also developed custom versions of Hoku Membrane that incorporate small amounts of fluorine into its hydrocarbon-based polymers.
Fuel Cell Customers
U.S. Navy—Naval Air Warfare Center Weapons Division: In March 2005, the company was awarded a contract with the U.S. Navy to develop and demonstrate a PEM fuel cell power plant prototype that incorporates its Hoku MEAs within IdaTech, LLC, or IdaTech, fuel cell stacks and integrated fuel cell systems. IdaTech is a subsidiary of IDACORP, Inc., a publicly-traded energy and technology holding company.
IdaTech, LLC: In April 2005, the company entered into a subcontract with IdaTech to specify the work that IdaTech would perform in connection with its prime contract with the U.S. Navy. Under the subcontract, IdaTech agreed to provide the necessary personnel, facilities, equipment, materials, data, supplies and services to integrate its Hoku MEAs within IdaTech’s fuel cell stacks and integrated fuel cell systems.
IdaTech, LLC: In April 2005, the company entered into a subcontract with IdaTech to specify the work that IdaTech would perform in connection with its prime contract with the U.S. Navy. The company selected IdaTech based upon its focus on stationary applications, integrated fuel processor technology and experience in developing and demonstrating fuel cell technologies for the U.S. Department of Defense. Under the subcontract, IdaTech agreed to provide the necessary personnel, facilities, equipment, materials, data, supplies and services to integrate its Hoku MEAs within IdaTech’s fuel cell stacks and integrated fuel cell systems.
Nissan Motor Co., Ltd.: In January 2006, the company entered into a Step 3 Collaboration contract with Nissan to further develop customized Hoku MEAs and a Hoku MEA assembly process for use in Nissan’s automotive fuel cells. The company provided work pursuant to the Step 3 Collaboration contract between January 1, 2006 and September 30, 2006.
Sanyo Electric Co., Ltd.: In December 2005, the company entered into a material transfer and collaborative testing agreement with Sanyo, or the Testing Agreement, to allow Sanyo to conduct additional testing of newer versions of its Hoku Membrane and Hoku MEA products. The company also agreed to collaborate with Sanyo on the testing of these products.
Manufacturing
Hoku Materials
VECO USA, Inc/CH2M HILL Lockwood Greene: In August 2006, the company awarded a contract to CH2M HILL Lockwood Greene to provide initial engineering and related services for its planned polysilicon production facility. In March 2007, the company elected to end its engineering services contract with CH2M Hill Lockwood Greene, and a new contract to VECO USA, Inc. for the initial design phase engineering, procurement and construction management services on a time and materials basis.
City of Pocatello, Idaho: In December 2006, the company received a letter from the City of Pocatello, Idaho outlining various financial and other incentives that could be available to the company.
Sanyo Electric Company, Ltd.: In January 2007, the company entered into a supply agreement with Sanyo for the sale and delivery of polysilicon to Sanyo over a seven-year period beginning in January 2009, or the Sanyo Supply Agreement.
Pursuant to the Sanyo Supply Agreement, the company granted Sanyo a security interest in all of the tangible and intangible assets related to Hoku Materials and all its equity interests in Hoku Materials, to serve as collateral for its obligations under the Sanyo Supply Agreement. This security interest is pari-passu with the security interests granted to Suntech Power Holdings Co., Ltd. and Global Expertise Wafer Division.
In May 2007, the company amended the Sanyo Supply Agreement and Sanyo granted the company a three-month extension until October 17, 2007 to complete its financing for the construction of its planned polysilicon production plant in Pocatello, Idaho.
Graeber Engineering Consultants GmbH and MSA Apparatus Construction for Chemical Equipment, Ltd: In January 2007, the company entered into a contract with Graeber Engineering Consultants GmbH, or GEC, and MSA Apparatus Construction for Chemical Equipment, Ltd., or MSA, for the purchase and sale of hydrogen reduction reactors and hydrogenation reactors for the production of polysilicon, and related engineering and installation services.
Idaho Power Company: In June 2007, the company entered into an Agreement for Engineering of Hoku Electric Substation and Associated Facilities, or the Engineering Agreement, with Idaho Power Company to begin the engineering and procurement process for the electric substation to provide power for the planned polysilicon manufacturing facility in Pocatello, Idaho.
Suntech Power Holdings Co., Ltd.: In June 2007, the company entered into a supply agreement with Suntech Power Co., Ltd., or Suntech, for the sale and delivery of polysilicon to Suntech over a ten-year period beginning in July 2009, or Suntech Supply Agreement.
Pursuant to the Sutech Supply Agreement, the company has granted to Suntech a security interest in all of its tangible and intangible assets related to its polysilicon business to serve as collateral for Hoku Materials’ obligations under the Suntech Supply Agreement.
Global Expertise Wafer Division: In June 2007, the company entered into a supply agreement with Global Expertise Wafer Division, Ltd., or GEWD, a wholly owned subsidiary of Solar-Fabrik AG, for the sale and delivery of polysilicon to GEWD over a seven-year period beginning in December 2009, or GEWD Supply Agreement.
Hoku Solar
Spire Corporation: In October 2006, the company entered into a Purchase and Sale Agreement with Spire Corporation to purchase a PV module production line and related installation and training.
Swiss Wafers AG: In October 2006, the company entered into a contract to purchase solar cells manufactured in Taiwan from Swiss Wafers AG.
E-Ton Solar Tech Co., Ltd.: In October 2006, the company also entered into a contract to purchase solar cells manufactured in Taiwan from E-Ton Solar Tech Co., Ltd.
Competition
Hoku Materials and Hoku Solar
The company expects to face substantial competition from companies, such as Powerlight, a subsidiary of SunPower Corporation, and SunEdison, and other new and emerging companies in Asia, North America and Europe.
In the polysilicon market, the company would compete with companies, such as Hemlock Semiconductor Corporation, Renewable Energy Corporation ASA, Mitsubishi Polycrystalline Silicon America Corporation, Mitsubishi Materials Corporation, Tokuyama Corporation, MEMC Electronic Materials, Inc., and Wacker Chemie AG.
History
The company was incorporated in March 2001 under the name Pacific Energy Group, Inc. and changed its name to Hoku Scientific, Inc. in July 2001.
