SunPower Corporation (SPWR) Earnings Call Transcript & Summary

Good morning, everyone. This is Bob Okunski, Vice President of Investor Relations at SunPower. I'd like to welcome everyone to Maxeon Solar Technologies' Capital Markets Day. I would also like to thank everyone for taking time out of their busy schedule to attend today's virtual event. We hope that after today, you will have a better understanding of the value of Maxeon post-spin and why we are confident in our long-term success. Before we get started, a few housekeeping items. On Slide 2, you will see our safe harbor statement. We will make forward-looking statements that are subject to various risks and uncertainties that are detailed in our SEC filings, including our 2019 10-K, previous 10-Q filings, our Q1 '19 and '20 earnings release and Maxeon's 20-F filing. Please see those documents for additional information regarding those factors that may impact these forward-looking statements. Before we begin, a few tips for today's webcast. [Operator Instructions] It will include a mix of live video, slides. During the prerecorded video segments, a video player will pop up for viewing and you can return the player to normal size by clicking the upper right corner, as you can see on this slide. This will allow you to see the slides as well as the video. I would also like to encourage everyone to visit Maxeon's website at maxeon.com to learn more about the company as well as view our latest SEC filings. Finally, we have also posted a copy of these slides that we will reference today on both the SunPower and Maxeon Investor Relation pages under the Events and Presentations tab. I would now like to turn the proceedings over to Jeff Waters, CEO of Maxeon. Jeff?

Thank you, Bob, and good morning to you all, and welcome to the First Capital Markets Day for Maxeon Solar Technologies. We thank you for attending. And we've taken a lot of preparatory work to work with the technology in this virtual environment. But in the event we do have any minor hiccups, we thank you in advance for your patience. We're very excited to present our company to you, and we have a full agenda. I'll start by sharing who we are as a company and our strategy and vision for where we're headed. I will then go deeper into our sales, marketing and product strategies in the rooftop and large-scale segments. And these presentations will be led respectively by Jim Dawe, our Head of Sales and Marketing; and Peter Aschenbrenner, our Head of Strategy. We'll then provide more detail on our R&D and operation strategies in both our IBC and our shingled products. And these will be covered, respectively by Markus Sickmoeller, our Head of IBC operations; and Wang Yan, the Head of our Huangshan Performance Series joint venture. Joanne Solomon, Maxeon's CFO, will then provide detail on the company from a financial perspective. As Bob said, we'll provide opportunities for questions after each presentation, but we'll leave the dominant amount of time for Q&A at the end. So first, a few words on Maxeon. Maxeon is a truly global company, and we see this as one of the great strengths for us going forward. We'll be domiciled and headquartered in Singapore with operations and R&D centers throughout Asia, North America and Europe. We have a global sales and marketing engine with 1,100 partners driving sales in over 100 countries. And we have a global brand in Maxeon and with the ownership of the SunPower brand, in all markets outside of the U.S. and Canada. Added to this, we have a growing base of over 900 patents. So we're well positioned to lead with and defend our innovation. The next slide. We're also blessed with 2 dedicated and strong investors. Total is a global energy leader and brings great expertise and depth in the downstream side of our business, both in the rooftop and the large-scale segments. They've had a trusted and long-time relationship with Maxeon through SunPower, and we're fortunate that it will continue. Tianjin Zhonghuan Semiconductor is a major player in downstream solar as a leader in both technology and production of wafers going into the market. We also have a trusted and long-time relationship with them. And in addition to bringing expertise to our Performance Series joint venture, they'll bring a strong time-to-scale mentality to our Maxeon products, which I'm sure will speed and economize our deployment of both our Maxeon 6 and Maxeon 7 products. The combination of these 2 companies makes for a formidable force of experience and insight, and it will be invaluable to Maxeon as it continues to grow its presence in the global market. So to help introduce you to Maxeon, we've put together a short video that describes who we are and where we're going. So please roll the video. [Presentation]

So as you can see, a very exciting and inspiring time to be a part of Maxeon Solar. And just as by means of introduction, I just want to share that I started at SunPower at the beginning of last year, really with 2 main purposes: the first was to help drive the spinoff of Maxeon Solar Technologies; and then to run it as its CEO. When I go back to when I was interviewing for the role, what compelled me most about the Maxeon opportunity is what I expect will draw in investors as well. With Maxeon, we have the opportunity to take Silicon Valley innovation that has created a very valued, differentiated product in a very large market. And to take that and to combine it with the scale, operational and capital know-how of China. It's truly the marriage of the best of Silicon Valley and the best of China. And we're bringing that to a large and fast-growing market that arguably is the most important one for the planet and for our generation. Over the last 1.5 years, I've learned a lot more about Maxeon and the opportunity, and my excitement has grown. We are on day 1, starting with a global premium brand in a $100 billion market, and it's a brand built on, very objectively, the world's best solar panels as well as a unique, broad and deep global sales channel that sells into more than 100 countries. The brand, the reputation of our panels and the channel have been built over decades and are truly an incredible asset. And there are assets that create a profound growth opportunity for us going forward. Today, you'll hear about the value of our brand and how it positions us to credibly bring more value to customers through microinverters, storage and energy services. You'll also learn of the success we've had in building new solar markets and the opportunity for us to enter into new markets, like Latin America. And you'll also see how we're going to build a premier position in a large-scale market, led again by innovation and reputation, and by working hand-in-hand with our long-time JV partner and now investor, TZS. We are one of a kind and are made up of the best the world has to offer in innovation and scale. We're a great opportunity for investors. And on top of that, we'll serve the world well and make investors proud to be owners in us. To the next slide. So why Maxeon, and why now? So as I'm sure many of you all agree, we believe the solar power industry is in a long-term growth phase. What sits at the foundation of it is a transition to retail grid parity. If you go back even 5, 10 years ago, people were putting solar installations from an ecological perspective and a little bit of altruism. Today, you get the ecological piece, but you also get the best from an LCOE perspective, the best form of energy at the best cost. We also are seeing, in the industry, a consolidation of the upstream supply chain ecosystem. We've seen it first with wafer supply with TZS now being a leader. We've seen it also in cell supply. And we think we're going to be seeing it too in panel supply. Really all of this is combining to a tripling of the market. But I would say, maybe even more importantly, the market is growing, but it's not just growing in one specific region. It's growing very globally. And if you look at the projections, you're going to see the majority of the growing outside of the United States. And that really sits at the core of why Maxeon is so well positioned to capture this opportunity. We have a well-established, industry-leading global DG go-to-market downstream channel and brand. We also -- and that's going to allow us to serve these markets as they pop up, and we can be a part of their growth. We also have a superior technology, not just for the DG space, but also for the power plant space. So we're able to service the totality of this market as it grows. And that also contributes to a very diverse investment for us. We also have very strong global strategic investors, as I described. So we have, as you know, I think we've just stated, for over 2 decades within SunPower. And separating from SunPower right now enables us to fully realize our potential. It was a great place to grow up, certainly. But now with the capital investment that we have with this spin-off, we're capitalized now to really grow and expand the great innovation that we've created with our Maxeon products and with the Performance Series products that we have and able to invest and probably really for the first time in many years, be able to meet all the demand that we have for our great technology with adequate supply. It's a very exciting time, and the timing is right. Let's go to the next slide. When you think about our strategy, we really think about it in 2 separate but very symbiotic paths. First, as you see, we're addressing a $100 billion TAM. And the way we think about it, about $32 billion of that is addressable directly by Maxeon and our products. First, on the left-hand side, you have our rooftop or DG strategy. This is a strategy that is predicated on innovation. Our IBC technology has been developed over decades here in Silicon Valley. And that innovation has led to proven premium pricing out in the market and a premium brand and premium margins. This brand is something that we believe we can leverage now going into new areas beyond the panel. So we announced yesterday, our relationship with Enphase to deploy microinverters. This is the first step as a part of that strategy. So a great brand, great growth, great profits coming from the rooftop side of the market. That brand also has a halo effect on to the right side, which is our large-scale strategy. And here, that brand will give us a brand and reputation for being a very stable player in the market with great quality, great reliability. That plays well when you're selling into big buyers. What also plays well for us, though, is the innovation that we have in our product technology. So in the large-scale space, it's about performance of the panel, but it's also about cost. So we have innovation through our shingled cell or patented shingled cell technology that allows us to get both performance and cost advantages. We leverage a supply chain that is the standard commodity supply chain within China. And through that, we're able to grow at scale and able to do so with very low capital expense requirements through the joint venture that we have in our HSPV joint venture. What all that scale brings is a couple of things that benefit not only our position there, but also on the rooftop side. It will make us much more important now with the supply chain. This will help from a COGS perspective, and it will also help from a working capital perspective. It will make us truly a big player in that market. So it will help with the profits on the large scale, but also with profitability on the rooftop side. Let's go to the next slide. Let me talk a little bit about our strategy. Really, when we think about our products, they're broken up into 2 different categories that are also very symbiotic. The first is our IBC panels, developed over the last 3 decades within SunPower. Our IBC panels have and have had for multiple decades, the best solar panel efficiency out in the market. And from a consumer perspective, the way you can think about that is that it gets you more power for the same panel, for the same-sized panel. So if you have constrained roof space, we have a great solution for you. If you want to get the most power that you can on your rooftop, we have the ideal solution for you. So consumers care about that. You then have also the lowest degradation rates from our technology, our IBC technology. This means that over the lifetime of the system, we degrade at a slower rate than the competitors' panels do. And you can get upwards to 60% more energy out of your solar system using our IBC panels than you can with competition. And last but by no means least, we have the best durability with our technology, with an over 40-year useful life. So you can imagine, if you're a Maxeon salesperson sitting across the table from a homeowner or a small business owner, and you're selling them our IBC panels, they're going to care about more power, they're going to care about more power over the lifetime of the system and the fact that they can put their solar up on top of their roof and not worry about it for 4 decades. That is a differentiator for us. On the shingled side, this is also a product family that benefits from great differentiation and great innovation. We have a patented unique mono-PERC shingled cell panel design. So that means we can take standard wafers that come out of all the supply engine that you have in China, we shingle them in a proprietary way, we assemble them onto panels in that proprietary way, and that allows us to get higher efficiency at a very competitive price. Coupling that now with the relationship with TZS, their G12 wafers is the largest wafer format in the industry. And that relationship is going to keep us on the cutting-edge. You're bringing in the joint venture, and we have a great competitively priced yet differentiated panel. The shingled cell technology also brings with it enhanced energy yield. And what that means is that if you have shading or if you have dirt that builds up on the panels, you get better performance than you would with competing technologies. And this means that you can get cost reductions in terms of being able to space rows more closely together, but also better reliability and output out of your system. And then lastly, we also have reliability advantages in harsh environments. This leads to a very comprehensive warranty. We got top module reliability performance. And again, if you're building up a large utility-scale or large-scale solar installation, being able to count on reliability from a proven, trusted partner is a value. And that's why we're also able to get premiums out of the large-scale side of the market with the shingled panels. Next slide. So we talked about technology. The other key -- one of the other key elements that we have is our channel. So we sell products under the SunPower brand and also under the Maxeon brand in over 100-plus countries. And we do that through a network of over 1,100 sales and installation partners just outside of the U.S. through the multidirectional relationship that we have, the exclusive selling and buying relationship that we have with SunPower in the U.S., they bring an additional 500 U.S. installers. So a very formidable force, very close to the customer, understand customer needs, able to sell the premium of what we have and help customers see why we are the best choice for them out in the marketplace. You can see on the chart in the middle, 76% of our sales come outside of the United States. Based on growth, we'd expect that to continue to be the dominant, and then if anything, grow as an overall percentage. And you can also see the deployment of our global sales and installation partners spread out nicely across the world, and that number is growing. And then you can see the results on the bottom right. And Jim Dawe and Joanne will talk a little bit more about this in detail, but as you can see, we've had good, steady growth across all the markets that we serve in the DG space, and we're expecting that to continue once again, given the great technology we have with our Maxeon 6 getting built out, our Maxeon 7 coming right on the heels, best-in-class panels and also with our Performance Series allowing us to attack some of the more cost competitive markets, we expect to see these growth -- this strong growth internationally continue. So I've talked about the product technology. I've talked about the channels. Please change to the next slide. I'm going to talk now about the brand. So a brand is built on the back of the world's greatest panels. And when you think -- if you're installing a solar system on your home or on your business or across an entirely utility-scale power plant, the panel is the biggest part of spend, and it's also what really is going to matter to you most when you think about the system that you're buying. So that presence, coupled with our dealer channels, the sales into 100 different countries has really helped us build up a great brand. And that brand is something that we've already begun to monetize as a company over the last number of years. First, with market expansion. That SunPower brand and the Maxeon brand has allowed us to expand into a variety of markets. You see in the U.S., we entered in 2003, followed soon by Europe, then Australia, by Japan, Mexico, Latin America. It has been a great move for us. And it's something you're going to see us continue as we go into other emerging markets like you can see in Southeast Asia. We've also used that brand extension to do a line extension, right, to go into the shingled line. That SunPower brand, the Maxeon corporate brand is something that really helps us also sell at a premium, those Performance Series panels that we do through our shingled technology. And last, and I would say probably what we just introduced yesterday is the brand extension. So again, we're trusted as a supplier of panels. It's going to be very logical for consumers to now say, okay, if I want to go to an AC panel, I want to add microinverters to my system, I would want to trust Maxeon. We announced just yesterday, as I said earlier, our Enphase arrangement, very high quality, great partner of ours. There's a preexisting relationship there already with SunPower. And so a lot of trust built up and great collaboration. So we're very excited to be able to announce that. But this is really a first step for us in the strategy. You see the microinverter, the AC panels, we are soon going to be coming out with strategies and plans around storage and also around energy services. So that is another great growth vector for us and how we're leveraging that premium brand. Let's go to the next slide. Another important push for us is around capital efficiency. And first, let me talk about how we're going to achieve that from an IBC perspective. First, when you look at each generation that we have of our Maxeon IBC technology, we -- one of the things that we target first, obviously, is efficiency, for all the reasons I mentioned on the slide a few slides ago. But the other is around driving down CapEx per watt. If you look at our Maxeon 5 and Maxeon 6 technologies, they are replacing our Maxeon 2 technology in our factories in the Philippines and New Mexico. That jump from Maxeon 2 to the new generations has allowed us to take our CapEx spend per watt down 50%. Maxeon 7 currently in development, is going to allow us to make directionally a similar drop down. So we're already bringing down the capital spend per watt on the IBC panel technology. The other way you should also think about IBC for us is that it is the panel that allows us to play into the premium side of the market. That's a market that's growing. It's a market that's very profitable for us. It is the core of our brand. It is very important strategically to us going forward, and it will be a big driver of our P&L. It is going to be smaller from a growth perspective than what you're going to see for us on the Performance Series side. And I'll talk about that and the other side, but the capital efficiency with the Performance Series is very aggressive. But you can see from 2017, we've gone from nearly all IBC to a 50-50 split now. And you'll see that gap widen even more with time. So in total, I would say that from an IBC perspective, again, core to what we do, and we're really driving capital efficiency, which I think is going to make us a strong company going forward. Go to the next slide. With our Performance Series product, this is really driven through the joint venture that we have with TZS. We bring to it our shingled technology. This technology that's been developed within SunPower, we're continuing it on here within Maxeon. That technology gives us the differentiation that I described. You couple that technology now and that differentiation with a great China ecosystem. First, TZS G12 wafer, which I described earlier, leading-edge technology, world's largest solar wafer in production. That then goes into the latest generation G12-based solar cell fab. So TZS has great relationships with those cell suppliers. And then that comes into our HSPV Performance Series joint venture, which Maxeon owns 20% of. So this is a great engine that's going to allow us to be extremely cost competitive, again, producing a differentiated product that can command a premium out in the marketplace. Coming out of that engine, 2/3 of that output goes into our global sales organization for Maxeon. And we sell it somewhat into DG, but predominantly into large-scale solar and on the power plant side. 33% of that that's not sold can go into China sales that's done through the joint venture. Now again, the beauty of this, we don't have a one-for-one dollar spend that's required for us through the joint venture. We will continue to invest into the joint venture to make sure that we keep our equity share ownership at the appropriate level. But this allows us to grow and expand that capacity in a way that is going to be very good and capital efficient. Let me turn to the last slide. And last but not least, I wanted to share with you our position within solar sustainability. So Maxeon, through SunPower, over the years has really been the pioneer in bringing sustainability to solar power manufacturing. First, you can see it through our commitment with the progress that we've made, with reduction in energy usage and also emissions over the years. But you can also see it through our commitment in clean manufacturing. So with landfill-free facilities in our Mexicali factory through our lead factories that we have, both gold and platinum in Malaysia, Mexico and the Philippines. But also through our pioneering Cradle to Cradle, Declare, right, showing great transparency and what goes into our panels. This has led to many awards. It's also something that we're going to carry forward, this rich heritage, and lean even further into it as we become an even bigger global scale manufacturer. We are -- within the first few quarters, we're going to move to, and we'll start to supply both SASB and TCFD reporting. So we'll give very great transparency into our investors as -- with the good that we're doing and how we're driving the company. So next slide, please. So in closing, I presented to you what we really see to be a great, strong growth platform that we, as Maxeon, are going to drive for greater leadership going forward. We have a strong premium brand that's been built and borne from decades of development of the world's best panels built by the most diverse and deep sales channel that's out there and selling into over 100 countries. We're going to monetize that platform and show great growth by growing beyond the roof with microinverters today, but then quickly moving into storage and services. You're going to see us expand into new growth DG markets. That's really going to drive that revolution of solar here over the next number of decades. And you're also going to see us grow in power plants, and that's going to bring great operational leverage in a very capital-efficient way. So with that, I would now like to turn it over for about 5 minutes of questions.

Thanks, Jeff. [Operator Instructions] Our first question comes from Ben Kallo from Baird. Would you talk a bit about your efficiency of panels and how important increasing efficiency is these days? Has mono-PERC caught up to your efficiency or in a range where your increasing efficiency is less a differentiator?

Yes. Thank you very much for the question. And you'll see this in a presentation by -- actually, by both Jim Dawe and Markus Sickmoeller. They'll show you the kind of steady advantage that we've had in efficiency. So first to address the first part of the question. So we've kept about a 3-point efficiency gap relative to mono-PERC here over many decades and over many generations of our products. We maintain that still with our Maxeon 5 and 6 products. Our Maxeon 7 product, which you can think about being available in about the 2023 time frame will allow us to keep that gap. So although there have been some increases in efficiency on the mono-PERC side, we've maintained that 3-point gap. Now a question around importance to consumers. Yes, efficiency is as, if not more important to consumers now than it has been. And really, it gets back again to, if I'm a residential owner or a commercial owner, increasingly, if you think about the electrification of our lifestyles, there's more and more that is being done electrically, including our cars. So having more solar power at your disposal, being able to maximize the solar power generation from your rooftop is going to become even more important going forward. So having that higher efficiency, along with all the other attributes that we have with our IBC family, having all that efficiency and getting more power output out of what you have on a rooftop is going to serve you well and something that we think it will continue to play with consumers.

Thanks, Jeff. The next question comes from Brian Lee from Goldman Sachs. What is the price difference on a per watt basis between IBC and performance panels, 30%, 40%?

I guess the way I would think about that, we don't give the specific pricing information on our panels. The way I would think about it, though, is from an IBC perspective, depending on the market. We play in the premium DG side of that market, so we get very different pricing in different markets. But I would say, by and large, you'll see the premiums that we command are anywhere from 1 to 2 to 3x what the competitors get. That's on the IBC side. On the Performance Series side, we still -- we do get advantages there. I would say it's not quite as substantial as what you see in IBC. And that kind of lens is driven primarily because of the buying power that you have of the larger buyers but also when you're dealing with a ground mount system, you don't get as much of the premium because you have more space. So the efficiency advantages do have value, but not quite as much as what you see on the IBC side. So I would think about Performance Series as being a smaller premium to mono-PERC and the IBC side as being a more substantial premium to mono-PERC.

Our next question comes from an individual investor. With regards to the Enphase microinverter announcement from yesterday, is this product exclusive to Maxeon?

The product is not exclusive to Maxeon. And Jim Dawe, when he goes through his part of the presentation, he'll speak through it. I will say, though, we have -- if you look at specific geographies that we have within the market, the relationship that we have with Enphase will allow us to grow the AC panels that we'll be providing. And maybe I'll have -- Jim Dawe will touch a little more on the Enphase relationship when we get to his part of the presentation.

Great. Our final question, also from an individual investor. On the spin-off of Maxeon from SunPower, what is the ratio of stock distribution in Maxeon to SunPower shareholders?

Yes. If you look at the ownership of Maxeon, we are roughly about 29% for TZS as an investor. It's about 36% for Total as an investor. And the remainder will go to the current shareholders of SunPower stock. And Bob, if you want to add any more of that, please feel free to.

No. I think we're good. We do have another question that just came in from Michael Weinstein from Crédit Suisse. How should we think about CapEx or technology upgrade cycles in the industry as you move forward from Max 6 to Max 7 to Max 8?

What we've seen from generation to generation is about a 50% drop in CapEx dollars per watt. So our Maxeon 5 and 6 technologies relative to Maxeon 2 gets us about a 50% drop. We're targeting that same level with Maxeon 7, and I would expect roughly the same with Maxeon 8. And if you think about that, that is -- I would say that is one of the interesting competitive dynamics is that as we advance our generations, we continue to get the efficiency gains and keep that 3% gap, but we continue to drop down the cost per watt with our capacity expansions. And what you're seeing as mono providers try to go to on TOPcon, it does bring in additional process steps. It does bring in additional cost and CapEx per watt. So if anything, we're heading in slightly different directions when it comes to the forward-looking path for us.

Okay. Great. Thank you very much, Jeff. There's a lot of questions. From what I can see, we'll be answering a lot of these questions as we go through the presentation. So what we'd like to do now is move on to the presentation from Jim Dawe, who's our VP of Global Sales and Marketing. Jim?

Thank you, Bob, and thank you all for attending. I'm pleased to be here, exciting. Please move to the next slide. So as you'll recall from Jeff's presentation, we have strategies for both the DG rooftop and the large-scale businesses. And my presentation will focus on the DG rooftop portion of business. Next slide, please. Before we dive into detail, it's worth mentioning that the potential for rooftop solar is enormous. The IEA published a report last year showing that even in their accelerated case, global installed capacity represents only 6% of what could be installed based upon available rooftop area. Next slide, please. The DG rooftop market is obviously not just about potential, it's a large and vibrant market today. The overall TAM for DG rooftop, which we define as residential and small commercial, will be $39 billion in 2021. Of that overall $39 billion in system value, Maxeon has a served available market of $14 billion. The underlying drivers of distributed generation markets, high energy prices and low-cost for solar will continue to fuel market growth. After the market disruption we're experiencing this year related to the pandemic, it's expected that the DG rooftop market will continue to grow steadily in the coming years. Next slide, please. One aspect of Maxeon's business that might not be well understood is the scale of our global sales channel, as Jeff covered briefly. We have over 1,100 sales and installation partners globally. And if you count the over 500 partners of our largest customer in the United States, SunPower, that number grows to over 1,600. Our partners are carefully selected and trained by Maxeon to be skilled sales and installation organizations, able to sell and deliver the highest quality solar systems available on the market today. Maxeon has been building our channel for over 12 years, starting with SunPower's initial expansion of its dealer channel outside of the United States in 2008, and we've been implementing the SunPower channel management playbook outside of the U.S. for many years. To give you a sense of comparison to U.S. stand-alone solar companies with which you may be familiar, we developed the chart on the right, which shows that Maxeon shipped over 500 megawatts through our DG channels in 2019. Next slide, please. Like SunPower, Maxeon's most dominant channel model is different than most other industry participants. In traditional channel models, modules are generally sold by competitors in container quantities and large in-country distributors stock and sell panels and BOS components to installers. In our most dominant channel model, Maxeon sells direct to over 1,000 installers in over 9 countries. We have the potential to provide standardized integrated products to our partners through factory integration. Our intimacy with our network places us in a strong position to get these solutions right. We can deliver to the job or install a warehouse, freeing up our customers and their time and effort to focus on outbound sales, installation and service. Maxeon provides extensive dealer training and sales enablement programs, which I'll touch upon later in greater detail. We provide customer service directly and through our partners to over 300,000 system owners throughout the world. The Maxeon channel structure builds brand, enables us and our partners to sell at a premium and ensures a high-quality customer experience. Next slide, please. As mentioned in the last slide, Maxeon provides sales enablement and training to our partners, ensuring that they are best positioned to explain all of the advantages of a SunPower system to their customers. But it goes beyond that. Maxeon is, in fact, in the business of actively managing the end customer experience through their purchasing journey. It starts with initial awareness, which we manage directly through our 13 localized websites throughout the world. Our actively managed social media networks as well as through the assets that we provide to our partners for using their outreach. Once the customer reaches out to us or one of our partners, we make sure that our partners respond to that lead and manage the customer through their journey, using the sales tools and training we have provided to them. We invest quite meaningfully in managing our partner relationships, reaching them through industry events, specific in-country partner events, road shows, webinars, trainings and direct sales calls. This actively managed program allows Maxeon to influence how end customers initially perceive, learn about and come to make a buying decision. Next slide, please. As Jeff mentioned, Maxeon's global DG business has been growing significantly in recent years. Both the EMEA and APAC businesses have been outpacing the market, having grown at 45% and 64% with compound annual growth rate, respectively. Both businesses have been on the upswing, thanks to the diligent management of our sales and marketing processes, but also through expanded market activity. We've been steadily increasing our reach, an example being our recent launch to the Latin America market last year. Next slide, please. In addition to our channel activities, our growth has also been driven by our improved and expanded product portfolio. As many of you know, Maxeon offers the highest performing solar product available to customers in the world with its IBC product line, also known in the market by the name Maxeon. It's an outstanding leader in efficiency, lifetime performance and durability. It is the technology for which SunPower brand is known throughout the world. Further, over the past few years, we've introduced our shingled product to the DG rooftop market, as Jeff mentioned. And this is also known as the Performance product line. It utilizes mono-PERC cell technology. This added a more mainstream product that competes more directly with commodity solar offerings. Peter will spend more time talking about it in more detail. This product line has become a very significant portion of our DG rooftop business, representing roughly half of our volume last year. The combination of these 2 products has formed a product portfolio that is succeeding in the market today, which I'll touch on more, later. Next slide, please. As we all know, it's not enough to have the best-performing technology in the market. We must continually improve. As you'll learn more about later today, we have plans to meaningfully advance both of our product lines, with the eventual introduction of Maxeon 7 and Performance 5. These higher-performing products will enable Maxeon and our partners to remain highly competitive in bringing the highest quality of solar systems to customers throughout the world. Next slide, please. I'd like to now spend a few moments talking about customer motivation. What did they see in our company? Why do they seek out and buy our products when there are lower priced options available. Next slide. As Jeff mentioned, the technology at the heart of SunPower solar panels, the Maxeon solar cell, is #1 in efficiency. We're known for this worldwide. This allows customers to obtain more energy in the same space or when space is tight, to install fewer panels to get the same output as you can see on the diagrams on the right. This feature is critical in DG markets where space is tight, and is a major reason why we've been successful for many years. Next slide, please. When customers are presented with a wide variety of options available in the market, some customers just simply choose to buy the best. Our Maxeon IBC line represents the product class with the highest efficiencies. And therefore, we can deliver the most power to customers. Other companies can increase their panel sizes to deliver more power, but at the cost of using additional space, more BOS and more labor. Next slide, please. Our solar panels are also known for their beauty and aesthetics. It's one of the product features that we found remains very important to end customers. You don't have to take our word for it, though. There are studies that show that in the European market, more than 70% of customers value aesthetics as a top purchase influence. 40% list that as the #1 criteria, according to the study. This is in line with our experience. Next slide, please. What our customers also come to learn is that we have designed out the most common failure points in solar modules. You'll hear more about this later from Markus. The customers come to understand that we provide unmatched reliability, a feature that is important when purchasing a technology intended to last for decades. Next slide. High-efficiency and reliability are important features for companies and individuals who need solar technology to perform for their groundbreaking visions. We supply many solar pioneers who are working to positively change the way the world uses solar energy. On the left, initially a part of Google, Loon is a network of balloons traveling on the edge of space delivering connectivity to people in unserved and underserved communities throughout the world, often in crisis. PV cannot fail when delivering connectivity to these groups in trying circumstances. OceansLab, led by Phil Sharp, competes at the forefront of ocean racing with 0 emissions. Our solar pioneers -- our solar powers his onboard navigation software, his communications and autopilot. For a single-handed racer, that means he depends on us not only for victory, but also for safety. On the right, Lightyear develops long-range solar electric vehicles and integrates Maxeon cells into their cars in the manufacturing process. One cannot change the world of mobility with commodity solar. Like us, our customers are inspired by these leaders and follow their lead when selecting technology. Next slide. As Jeff mentioned, we're also a leader in sustainability. We're the first and only to transparently share our full ingredient list, the first to provide Cradle to Cradle certification. And we were recognized by the solar industry with the 2019 Sustainability Award from pv magazine. Customers are increasingly concerned about the way the products that they buy are built, and are drawn to us as a leader. A recent IBM research report said that for those who care more about sustainability, there's a willingness to pay a premium for sustainable brands. To the next slide, please. These advantages resonate not only with residential customers, but also with corporate customers looking for similar features in the brand of solar they install. We're often selected for groundbreaking projects like Powerhouse Brattørkaia, an energy positive future-proof building located in Norway that will generate more energy over its lifetime than it will consume. Next slide. As mentioned earlier, we have a powerful product portfolio, and we've developed a compelling sales strategy to capitalize on that. We train our partners to start by talking to customers about the advantages of the SunPower brand, as Jeff talked quite a bit about, irrespective of the line that they choose. We're a trusted world-leading brand, providing top-quality products, 35 years of history and reliability. As they then move to talking more about specific products, they start with the highest value products, the IBC line. If the customer needs to hear more about mainstream offerings, a partner can move to our shingled product line. The halo of the premium brand and IBC product lines positively impact the shingled line. This classic portfolio strategy has led to dramatically increased sales that we've delivered in recent years. Next slide, please. I'd like to now share with you some of the results we've seen recently through the deployment of our strategy in the European market. The blue bars present the IBC product line and the green boxes highlight the market share growth that we've enjoyed. The residential market is on the left, and the commercial market is on the right. The addition of our shingled product line has dramatically added to our volumes, which is represented by the orange bars. We introduced the Performance line in the commercial segment at the end of 2017 and in the residential segment in early 2019. You'll note that we have generated this growth while also increasing the price premium over the global average price of mono-PERC panels -- excuse me, local prices of mono-PERC panels. You'll note that we obtain a premium in both product lines, evidence of the value of the products themselves, our portfolio sales strategy and the value our partners bring to end customers. We believe that our growing share premium -- or excuse me, growing price premium also reflects that customers in the DG rooftop segment value more than just low price. It's our ambition to expand these results to more territories throughout the world as markets mature. Next slide, please. Now the premiums that we achieved in the rooftop segment represent meaningful values, both nominally and as a percentage over the competition. It is reasonable to ask, will customers continue to be interested in products that reflect these premiums? By our calculations, customers purchasing a 5-kilowatt system might pay EUR 500 to EUR 1,700 more for the PV module component of their system when they're buying SunPower panels. That's significantly lower than it used to be when the value of systems were much higher. But as the price of systems has come down, the PV portion has grown to be a smaller number nominally. It's worth noting that, at least in Italy, consumers regularly pay more for other equipment for their home, like air conditioners on the top and televisions on the bottom. We believe solar will be no different. We think it's normal for consumers to perceive and pay for value when offered premium products. Next slide, please. So what does the future hold? As Jeff mentioned, given our market position and channel strength, we have the potential to expand our offerings in the coming years. We've been building our IBC business for over 12 years. It is a solid foundation of our platform. We added shingled solar panels more recently, providing our partners with an additional product line that they both -- that both they and their customers have found very valuable. Yesterday, we announced a deal to expand our offering once more by offering AC modules with microinverters from Enphase. AC modules will provide SunPower global installers with the advantages of simplified logistics and operations, accelerated design and faster, simpler, safer and more cost-effective installations. This deal builds upon SunPower's relationship with them and calls for us to roll out AC modules in Europe later this year. We will expand more broadly in 2021. In a later evolution, we can begin to combine our solar offerings with storage, unlocking even more value for our customers. This is especially important in international markets driven by the economics of self-consumption. Finally, we also have the potential to deliver additional value to customers -- our customer base in future years, either directly or through partnerships. Some examples might be a follow-on product offering or services related to self-consumption, optimization or demand aggregation will be unique to each territory. Next slide, please. This is my summary slide. But before I summarize our strategy, I'd like to call attention to a special project that we are very proud of, on the left side of your screen. This is a picture of the carbon neutral, Barangaroo development in Sydney Harbour. You can see the Sydney Opera House in the background. It's owned by Lendlease. SunPower provided this project with a 700-kilowatt Maxeon solar system, which is placed across numerous buildings, some over 200 meters tall. It's the largest high-rise commercial rooftop solar installation in the Southern Hemisphere. This is an application where efficiency is critical in the extreme and another example of the sort of groundbreaking project that Maxeon technology can enable. Back to our strategy. We plan to maintain our product and brand leadership in both the premium and mainstream segments, and we plan to continue obtaining premium ASPs in both segments. We'll continue to focus on growing share in our core markets, like Europe. We will also work to expand in other regions like Asia, Latin America, Middle East and Africa. We'll expand our product portfolio. We look forward to bringing AC modules with Enphase to our customers and to add in more offerings like that in the coming years. Finally, we'll be finding ways to deliver more value to our customer base, which is 300,000 strong today. And with that, I'd like to answer some questions.

Great. Thank you, Jim. [Operator Instructions] So we have a lot of questions in the queue right now that are more relevant to the general Q&A response session. So I'll try and get to the specific questions related to each presenter, and then we will save the other questions for the general Q&A session. So our first question, Jim, comes from Aric Li of BofA. As Maxeon and competitors both increase efficiency and drive lower costs, how do you think about pricing deflation, especially in the DG market?

Gee, Jim. Why don't you go ahead and take that one directly? Okay. Why don't I jump in, I'll make some comments first, and then Jim can chime in. So we very actively track competitive pricing, both with input from our dealer channel and our direct salespeople, but also price forecasting coming from third-party pricing providers. All of our business plans, all of our product strategies, our pricing strategies are all closely linked with the obvious assumption that pricing will continue to drop. Now that's really what drives a lot of our product strategy as well. Great efficiency. Great -- all the performance benefits that we described, but a big part of our innovation is around how do we get cost down, which is good not only for our business, right? It's a part of maintaining great margins. But it's -- frankly, it's also great for the industry. The only way that solar got the levelized cost of energy down to be the lowest in the world is because of great price competition. So we see it as healthy. We think we have the innovation and capability on both the IBC products as well as the shingled technology products to get there.

Thanks, Jeff. The next question comes from Jonathan Art from Federated Kaufmann. What is the launch plans for AC panels? Is it in Europe initially? Also, AC panels have been in Europe for a significant period of time and have not done very well in that market. How will you be -- how is your product different than what's already being offered?

Jim Dawe, I'm hoping that you're on. Do you want to answer that question directly?

I think he might have had some technical problems, Jeff. So if you want to handle that for now.

Right. It seems as though we lost Jim. Yes. So the AC panel market, it's interesting when you look at the broad array of markets that we serve as a company, yes, I think one of the things that's most fascinating about the business is that they each have their own different dynamics in terms of things like AC panel adoption and how good of a market we see for that, we see kind of fitting in with the appetite for the consumer, and a lot of it comes from some of the feed-in tariffs and other more regulatory elements, but also it comes into the buying behavior of the different customers. For AC panels, we see a great opportunity globally. Certainly, it's one that's taking off within the U.S. We see within Europe. We see great opportunities. And that's going to be one of the key areas of focus for us for -- within Enphase. And again, I think this also speaks to the value that we have with our dealer channel. So Jim talked about it, but our dealer network spread out -- these are relatively small dealers that are dealing directly with consumers. So they can sit down and have the conversation about AC panels and about why it would be a good thing for the consumer, the benefits that they can get from it. And they can get that feedback. It's the kind of thing that we can also use as an advanced kind of marketing engine. We can go into different markets and have conversations about the potential of doing that and know what the consumers think. So it's a great access to the voice of the customer. So you're going to see us push hard in Europe first. There are other markets that we're also pursuing. And I would say specifics beyond that, I probably wouldn't provide at the moment. But suffice it to say, it's a good area of growth for us.

Great. Thanks, Jeff. We do have Jim back, I believe. So our next question comes Phil Shen from ROTH Capital. Jim, we noticed that there is a carve-out for selling utility-scale solar in the U.S., meaning you don't need to do it through SunPower. Do you plan to sell P-Series directly into the U.S. for utility scale?

The short answer is that, yes, we do have the ability to do that, and we're certainly not excluding that possibility. We're working on plans to address that market. We don't have anything to announce at the moment, but it's certainly in focus for us.

Great. Thank you, Jim. That's all the questions we have specific to Jim. As I mentioned, additional questions not related to Jim, we will move them into the general sessions, but please continue to submit your questions.

Moving on, we'd like to turn the presentation over to Peter Aschenbrenner, Chief Strategy Officer for Maxeon. Peter?

Thank you, Bob. Good morning, everybody. Thanks for joining us on the occasion of this Maxeon Capital Markets event. It's Peter Aschenbrenner, and I'm responsible for strategy and business development at Maxeon. So let's get started. Next slide, please. So today I'm going to review our strategy for the large scale or solar power plant business. As Jeff mentioned earlier, this market is increasingly important part of Maxeon's overall strategy. Since the initial commercialization of our single panel technology in 2016, and subsequent scale-up at our HSPV joint venture, we've become much more active in this mainstream part of the solar market. Our goal here is to become a top supplier to this market based on our differentiated technology, and I'll be spending more time on that. Next slide, please. Let me start with a few macro-level market observations. During the past decade, the cost of solar power has come down dramatically to the point of where solar power is now the lowest cost source of electricity in many locations around the world. This dramatic cost reduction drove 2 key developments. Demand, as measured by annual shipments, increased by a factor of almost 20x over this period. Secondly, demand increasingly globalized, as shown in the chart on the right. There are now more than 20 countries with significant large-scale solar markets. Solar power is now much less dependent on financial subsidies than in the past. And this should decrease demand volatility due to policy disruptions going forward. Finally, we believe that low-cost storage batteries will enable continuing and increased penetration of large-scale solar on utility grid. Next slide, please. Now let's zoom in and take a closer look at current market growth trends. The data on the right of this page is from IHS, a well-known market research firm. From 2016 through 2019, volume in the large-scale market grew at a CAGR of almost 9%, followed this year by a forecasted slight decrease due to the impact of COVID-19. IHS forecasts 5-year future market growth, also around 9% with relatively faster market expansion over the next few years as post-COVID demand is released. Based on current volume and pricing, the available market for large-scale systems based on total installed price is over $60 billion. Of that amount, Maxeon will address a served market of around $18 billion, which is the approximate total revenue associated with panel sales in this segment. As mentioned in my previous slide, market growth will be driven primarily by economics, namely the highly competitive cost of solar electrons. Next slide. I'll spend a few minutes now reviewing our extensive power plant legacy, which dates back to one of the first multi megawatt solar power plants in the world, built by PowerLight in 2004. This project in Bavaria was followed by over 1 gigawatt of similar projects built in Germany, Italy and Spain. In many cases, SunPower was active in the development and construction process as well as supplying the panels and other hardware. Our focus moved to the U.S. about 10 years ago, where SunPower was a pioneer in the U.S. solar power plant business, building almost 3 gigawatts of solar power plants, including one of the world's largest, the 750-megawatt Solar Star project in California. The relevance of this experience for the team at Maxeon is that we have a deep understanding of the entire power plant value chain, and we can apply this understanding to the development instance of better solar panel designs. A few years ago, our focus in the power plant business shifted from development and construction to selling solar panels to other developers and EPC customers. The 2 Southern hemisphere projects shown here are a good examples of those recent panel supply projects, including a 190-megawatt project built for Total in Chile and the largest power plant project to date in Australia built by BELECTRIC, both utilizing our Performance Series, shingled technology panels. Next slide, please. Now let's look at the recent development of this business. As I said, when we exited the power plant development business, we refocused on panel sales to third parties. Since that time, our sales have grown at a compound rate of over 100%. This growth was driven largely by the commercialization and scale-up of our shingled panel technology, which offers customers a very compelling value proposition. We expect that the further expansion of our HSPV joint venture will enable Maxeon to [Audio Gap] Jeff showed a version of this slide earlier, and which shows how we leverage our unique, innovative, shingled panel technology through a low-cost, capital-efficient manufacturing ecosystem in China. The manufacturing process starts with new larger 8-inch G12 format silicon wafers, manufactured by our partner, TZS. TZS is currently the only supplier of G12 wafers. These wafers are transformed into custom mono-PERC solar cells in new purpose-built solar cell fabs and then assembled into shingled solar panels in 2 new 3-gigawatt smart fabs that Yan will touch on a little bit later. Maxeon markets the result in products outside of China with an allocation option for up to 2/3 of the total capacity. Portion of the capacity not sold by Maxeon is marketed by HSPV and TZS inside of China, which is the largest solar power plant market in the world. Next slide. I'd like to go a little deeper now on how our shingled panel technology provides valuable customer benefits, including higher panel efficiency, enhanced durability and superior energy delivery. By converting conventional mono-PERC solar cell technology into our proprietary shingled hyper cells, we, first of all, eliminate inactive space between the cells, increasing panel efficiency by around 5% relative to conventional panels. Secondly, our technology has engineered out the most common form of panel failure, namely the stress caused by contraction of conventional solder joints on brittle silicon. The chart on the right of the slide shows results of accelerated testing at DNV Gl, an independent test laboratory. After 800 thermal cycles, our shingled panel shows no power loss, while many competing panels suffer significant power loss. [Audio Gap] Cells together in a patented arrangement that minimizes power loss under typical shading conditions, thereby enhancing energy yield in real-world conditions. Next slide. So let's look at our power plant product portfolio. On the left-hand side of this slide is the product we've been selling for the past 2 years. When originally introduced, the P-19 was one of the first panels with a-rated power of over 400 watts. This year, we are introducing 2 higher power panels in the 500-watt range, a P-3 in our existing HSB facility, using conventional G1 format cells. And the first of our P-5 products made in the new G12 smart ABS using larger 8-inch wafers. Next year, we plan to introduce a yet higher power P-5 panel, which will have a power rating of more than 600 watts. Please turn to the next slide. So how do these products compare to the competition? The chart on this slide shows the position of our new P-5 products versus the existing competition, the y-axis on the chart is panel efficiency. Higher efficiency is better for customers, allowing for more power to be installed on a given site and leveraging area related costs, such as trackers, cabling, et cetera. The x-axis is rated module power. More module power is also advantageous within certain handling limitations, leveraging mounting and interconnection labor costs. As you can see by the cluster of gray dots, each representing a competing module type, most products sold today are in the range of 400 to 450 watts. Our new P-5 panels are at the very top edge of available panel efficiency, but also provide significantly more power per panel than most competing products. Let's turn to the next slide and understand the customer value of this differentiation. So this chart shows the detailed elements of incremental customer value that accrued to our P-5 panels compared with conventional 400-watt mono-PERC panels. The example we show here is based on calculation of a single access tracking system in Egypt. First is the benefit of lower degradation. This shows as a relatively modest benefit on an LCOE basis because of the effect of discounting on future degradation savings or cash flows. Second is the benefit of enhanced energy production or yield with the combined effect due to bifacial energy production, lower series resistance and lower temperature coefficient. The next large system -- the next large green bar represents savings that accrue to the initial [Audio Gap] things in reduced electrical and mechanical material and labor due to higher panel efficiency and power. Together, these benefits add up to a price premium of around $0.04 a watt or roughly 20% of current total average panel selling price. Next slide. Let me shift gears now and talk a little bit about our technology road map. Marcus showed a similar slide relating to our IBC technology. Unlike with IBC, where we maintain a significant performance gap versus the rest of the industry, our strategy with the P-series has been to define the high end of the mainstream panel performance range, with our Performance products. As you can see on this chart, we've gradually improved our panel efficiency over the past few years to stay just ahead of the competition. We believe that our new P-5 products will maintain this trend going forward, and we're currently developing a next-generation shingling technology with yet higher performance and lower cost. Power plant customers are extremely attuned to the economic benefits that technology differentiation can create, and we are highly focused on continuing innovation as a means of monetizing such differentiation. Next slide, please. Innovation needs to be protected, and Maxeon starts our new life with a strong patent portfolio relating to shingling technology. With 50 patents already granted and almost 100 further pending patent applications, we're in a very strong position to maintain our strong product differentiation. Our portfolio includes not only fundamental process patents describing our manufacturing process, but also key design patents covering important aspects of our hyper sale layout and interconnection techniques. Please turn to the next slide. So let me review the key aspects of Maxeon's strategy in the power plant business. Over the past 5 years, we have cooperated with TZS to build a supply ecosystem in China to produce our leading unique panels with what we believe is a world-class cost structure. This manufacturing capacity is inherently capital-efficient and is particularly so for Maxeon due to our JV shareholding structure. The HSPV joint venture is in the process to extend capacity from 2 gigawatts to 8 gigawatts, as Yan will explain next. This additional capacity will provide the fuel for Maxeon's further growth in this market, sharing the advantages of our unique technology with our customers for mutual benefit. Now I'm happy to take a few questions.

Great. Thank you, Peter. Our first question comes from Philip Shen from Roth Capital Partners. Will you increase P-series capacity? If so, will it be under the same terms as the JV with TZS i.e., getting 2/3 of the output, but owning 20% of the JV or something similar?

I'll go ahead and get that, Jeff, if that's okay. Yes, the answer is yes. We are in the process of expanding -- the joint venture is in the process of expanding capacity from 2 gigawatts to 8 gigawatts and the contractual relationships between the parties will remain as they are. That means our 2/3 allocation option will be preserved.

Great. One more question, Peter. For your ASP premiums -- this comes from Aric Li from BofA -- for your ASP premiums, can you clarify what you mean by commodities, solar, baseline, used for your comparisons, ASP per watt efficiency in wattage?

The commodity panels that we referenced to in our chart was a 400-watt mono-facial, mono-PERC panel, which is the most widely used panel currently. I won't comment on specific module pricing for those products. I think there's a lot of intelligence in the market about module pricing in the power plant business.

Our next question comes from John Segrich from Luminus Capital. What is your CapEx you will have to spend on the P-series expansion per gigawatt of expansion?

We don't disclose -- go ahead, Jeff.

Yes and you can add any color to what I miss. So as a part of our ownership of the JV there is not any requirement for us to do direct CapEx investments on a dollar-for-dollar basis or a percentage of percent per dollar basis. That said, we will invest into the joint venture. Obviously, it's critical for us, and we'll continue to invest as a means of keeping up our ownership and equity within the JV at a healthy level. Anything you want to add to that, Peter?

I might have lost Peter there for a second.

[ He said ] what?

Yes, that's all the questions we have for Peter. Thank you very much, Peter, and thank you, everyone, for your questions. I'd now like to turn the call over to Markus Sickmoeller, the Chief Operations Officer for Maxeon. Marcus?

Yes. Thank you, Bob, and thanks, everyone, for attending and I'm very happy to give you a short overview about our IBC technology and manufacturing. Next page, please. So first, let's look where do we stand historically with the IBC technology. Looks like we also lost -- okay. So SunPower IBC is a leader in IBC solar technology. If you look back, then we produced up to now, we shipped 31 million panels and we produced 3.5 billion cells. And putting that into perspective to the next biggest competitor means we shipped 17x more than the next competitor, volume-wise. Looking at the technology, what is differentiating us? So over time, we had 6 technologies up to today and are working on the seventh one. And what they have in common is our IBC platform and especially the development platform and the know-how. So we have a very strong patent portfolio on the cell design. And together with our capability to develop unique materials, proprietary processes and customized equipment wherever it's adding value to the technology of the customer, with that one, we are able to differentiate us and develop those technologies that hold well [ for us] since 2007. This [ REV ] then gets combined for the rollout as the best-in-class reliability program and the fine-tuned optimized deployment process to get the technology into the market. Looking at the different technology generations, we see, starting with 2004, where we basically brought up to market the first commercially available IBC solar cell, then in generation two, we -- in 2007, we were the company implementing the laser processing for contacts and got a higher efficiency again generation 3 in 2015, first technology that had a tunnel and junction solar cell as a base and, again, higher efficiency. And late but not least, taking this technology bringing it to larger wafers and do a lot of work on cost reduction as cost and process simplification brought us to the current technologies, Gen 5 and Gen 6. Moving forward, there will be a Gen 7 in 2022 at the end of the year that will have a new architecture with a dramatically simplified process. And by that one, we get the cost reduction reduced some more. If you look into the main differentiations between IBC and PERC, the first difference is very obvious. The cell on the right side has contact only on the backside that is away from the sun, while this one, there's less shadowing effect, and this allows more of the sunlight being converted to electrical currents in the cell. And this means we can get about 3% average efficiency advantage compared to competitors. It's not only the shadowing, it's more than that, but all over, it's a 3% difference. And in the Gen 7, we even think we will get to 26% efficiency and up. Furthermore, intrinsically to the design, our technology needs -- does not need the diodes as a safety requirement because ourselves have the unique hotspot behavior that is an issue on PERC cells, but that is not an issue that comes to bearing on IBC cells. Next page. What's our technology mean on product level for the customer? Peter showed the same for the power product we are selling, where the cells where we offer products that are on par on the upper end efficiency and have higher power than the competition. With the IBC portfolio, what is for DG and commercial installations, we offer the highest efficiency panels in the market. We do this since generation 2 and we continue to do this with generation 3 and 5 at the moment. Going into reliability, what is another very important factor for our customers, the reliability of the IBC technology is unmatched. One of the main degradation effects in panel degradation is the daily thermal cycling that stresses literally the cells as well as electrical connections of the cells to the solar points. And experiments on the right-hand side shown as results in the graph, where the number of cycles is on the x-axis and on the y-axis should be the degradation, shows that even conventional good panels sold from the very established vendors show a lot of degradation, where basically, the effect does not exist for IBC panels from SunPower. What does this mean as an experience for a typical customer? Putting into perspective normalized events of customer returns that you have with some products you might buy in your life and with the SunPower panel, so the probability to have to return one of our panels, while originally dishwashers, televisions, smartphones and other things, I think are events everybody was exposed to, conventional solar cells are not that many have experience as a return, but the SunPower panels are in fact 100 better in the return rate. And that means the probability is between one very improbable and an event getting hit by a lightning stroke (sic) [strike] and a super improbable event getting hit by a comet, what basically never happens. So what are we planning to go forward? Coming back to these to the graph that Jim showed and Peter showed for the different technologies, we have to get from 2% to 3% of efficiency gap between our technology and the average PERC technology established in the market. And this next Maxeon 7, that is currently in development, we plan to keep this advantage going forward. But that's not all for Maxeon 7. We also work much, much further on cost reduction and CapEx efficiency. So we will implement a novel low-cost metalization technology, do a radical process simplification by implementing a new cell design. The product cell efficiency will be around 26% or better, and the good hotspot behavior already differentiates us for the current IBC cells will be completely designed out. So it's an intrinsically hotspot resistant design. In addition to that one, of course, it will be supported by a very strong patent portfolio and technology potentially can be rolled out on G12 phases.

We seem to have lost Markus' audio for a second. We'll try and get him unmuted. Thank you. [indiscernible] We've seem to have lost Markus'. Peter, do you want to pick up on his slides?

Sure. I'll continue on here. Can you hear me, Bob?

Yes, I can. Thank you.

Okay. So I'll continue on here until we get Markus back. So this slide shows a kind of a process complexity map whereby, historically for a conventional silicon solar cell, adding -- attaining higher efficiency has required the addition of process steps. This was true moving from a back-surface field cell to a mono-PERC cell. It's true moving from mono-PERC to a TOPcon cell. And it's been true, as you can see here from Maxeon 6, to get those last few percentage points of efficiency required the addition of significant process complexity. With Maxeon Gen 7, we've engineered a way by the inherent architecture of the cell itself to get significantly higher efficiency with limited additional process complexity. And that's what makes this product such a breakthrough. Next slide, please. So as Markus mentioned earlier, hotspots are one of the Achilles heel of conventional silicon solar cell. When shaded, what happens is that the other solar cells in a module push a shaded cell into reverse bias or reverse voltage, and for a conventional cell that relates -- it causes a runaway thermal effect, which essentially leads to a very hot -- all the current going through a particular point in the cell, which gets very hot and can even melt and cause DC arcs. This is the most common cause of fires on rooftops with solar panels. Our IBC technology is inherently better in reverse bias. And with Maxeon 7, as shown here on the left, the picture on the left, we've engineered a way of essentially sharing current and reverse bias in a way that the cells don't get hot at all. This allows us to reduce the cost of materials, we don't need to use bypass diodes in the wiring of the module, which can save cost, and we have what is essentially an inherently safer product for use on rooftops. Next slide, please. So this slide shows our manufacturing -- our global manufacturing footprint. We have solar cell fabs in the Philippines and in Malaysia. Fabs 3 and 4, we'll see a little bit more detail on those in a second. We have module manufacturing facilities in Mexico, 2 in Mexico and 1 in France. And together, we have a capacity of about 1.5 gigawatts limited by the solar cell capacity of our Asian fabs. We've been running both Fab 4 and Fab 3 for many years. And our strategy going forward, as you'll see, is to upgrade technology within each of these fabs as opposed to building new fabs, which are inherently more expensive. Next slide, please. So this slide shows the refresh -- the technology refresh that we're in the process of doing at Fab 3 in Malaysia. This chart shows as a percentage of total IBC production. You can see that our Gen 3 product made in the Philippines continues about 40% of our total production over the next years while we retrofit our legacy, lower efficiency, higher cost Gen 2 technology with higher efficiency, lower cost, Gen 5 and Gen 6. And by the end of 2021, all of our manufacturing in Fab 3 will be this new higher efficiency, lower cost technology, which will drive higher ASPs and enhanced margins. Next slide, please.

Peter, excuse me, I believe we have Markus back online. Markus, are you available to pick up the presentation?

I'm back. If you can hear me in back. Yes, sure.

Yes. Go ahead, Markus. Go ahead.

Yes. Let's come to the product and portfolio in ways of patents and the underlying patents of the IBC technology. Peter showed before, we have about 144 patents for the P-Series technology. For the IBC technology, we have about 10x as many, which is 1,350. 800 of those are already granted and more than 500 are still in application stage. The U.S. patents are exclusively licensed to us, and we own all the patents outside of U.S. On the right-hand side, as an example, you can see the patent that is underlying our Maxeon 7 technology, where one of the very differentiating features is that we have a technology where we put laser contacts in the middle of structured contacts of another preexisting process, and this is a very highly difficult process to maintain and we'll differentiate it. To come back to sustainability, what Jim and Jeff showed before, on the right-hand side, you can see the things that are visible to our customer in terms of sustainability that has declared transparency of the material used and our Cradle to Cradle certification, but we make sustainable manufacturing part of our day-to-day business. So we built our facilities in a way that they are -- that they provide sustainable manufacturing. So we typically certify our factories LEED golds or our offices even LEED platinum. And in Mexicali, we even reached a non -- landfill-free facility. And then on day-to-day, rolling the technologies out in the factories, we work on less consumption of everything day-to-day, so whether it's energy or emissions or water being reduced over the last 4 years by more than 20%. To come to the end of my presentation, there's a lot of things that stay the same when we go forward for IBC. What stays the same is our innovation leadership that we will provide the highest performance products to our customers with superior reliability, that one is based and that will also not change in our world-class reliability engineering and monitoring program. And also not changing is, of course, our commitment to health and safety of our employees. What will change though is that we will go for faster product cycles. We will deploy in existing factories, what is allowed by the higher productivity of the new technologies and via [ accelerate ] cost reduction. This is facilitated by increased use of [ summer ] production tools that are significantly better in CapEx productivity and also throughput. And last but not least, the new much stronger ties with TZS and HSPV going forward will allow us to work on a lot of synergies between the different companies and the different cultures. Last but not least, in equipment automation, wafers modular materials, what is more a supply chain topic, but also to get the best of both worlds of manufacturing and technology deployments. Thanks for listening, and also thank you for Peter, for backing me up so nicely. Now I'm open for questions.

Thank you, Marcus. I'm glad you were able to reconnect. Obviously, technology is great, but sometimes we do have issues. But the first question I have is, by the end of '21 and '22, how much total IBC capacity do you plan to have online? Separately, any estimate on the expected ramp of R&D spend through 2022 for the Maxeon 7 launch in 2023? And that comes from that comes from Moses Sutton at Barclays.

Markus, let me take a first stab at that question, then I'll have you jump in. First, thank you for the question, Moses. Let me speak on the R&D piece first. So we will see, I would say, some incremental R&D spend, but I would say for the most part, our R&D spend is going to stay fairly steady even as we scale the company. It is one of the beautiful elements of the capital coming in is that we're able -- the same amount of R&D that we would build out a gigawatt for in the past, we're not going to have that same amount of R&D building out many, many multiples of that going forward. So we expect R&D to stay pretty stable. We will -- I would say, where we'll see some increase in R&D spend will be on -- in Singapore. So we are, as a part of our domiciling there, we are going to be building up a lab. And really, the purpose of that lab is going to be to accelerate product technology, going from great new idea that comes out of to the birthplace in Silicon Valley, gets over to Asia and gets ramped up as quickly as possible, and having a team there with all the great talent you get in Singapore working with are already great R&D teams in the Philippines and Malaysia, but we think that's going to accelerate us getting to market quickly. And that's something that will help also with Maxeon 7. From a capacity perspective, we are going to be building out our Maxeon 6 family, which is the kind of next adjunct to Maxeon 5, so we will be building up our capacity. And the details on that are listed in the 20-F. And I think when Joanne maybe gets to her section, we can also talk about that. We will be building out the P-Series then -- or excuse me, the IBC. The Maxeon 7 build-out will start out over the course of 2022, and we'll see that start to ramp into production and be in full production in 2023 going forward.

Great. Thanks, Jeff. Our next question comes from Michael Weinstein from Crédit Suisse. Do you expect any downtime in IBC production during the ramp-up phase of your next generation technology?

So Markus, do you want to talk about the transition from first Maxeon 2 to Maxeon 6, but then also as we then begin to ramp up Maxeon 7?

Yes. Sure, my pleasure. So for the conversion of Maxeon 2 to Maxeon 6, we are basically scaling it in a way that the downtime we were experiencing is already behind us. So the only downtime we experienced for the conversion of Fab 3 was when we had to reduce the first-line of Maxeon 2 and install the first Maxeon 5 line. Now we have enough space because of the much better efficiency of the new technology to put in additional lines without getting volume decreases. From Maxeon 7, it will be similar. There might be, for the very first line, a minor dip, but it's just only a couple of megawatts. And then because a Maxeon 7 line has more than double the capacity than a Maxeon 3 or 4 line -- 3 line, that should not be an issue.

And just one other point I'll add to that. The other -- one other beauties of Maxeon 7 is that it is architected that we will be able to leverage a lot of the existing investment into the Maxeon 5 and 6 lines. So that also helps us from a CapEx efficiency perspective.

Great. Thank you, Jeff and Markus. One final question is a follow-up. Can you please let us know how much IBC capacity you expect to have at the end of 2020 and 2021?

So Markus, do you want to speak to that answer?

Sure. At the end of 2020, we currently -- we have -- the current capacity what is 900-megawatt in Malaysia and 550 megawatts in the Philippines, that is the 500-megawatt in the Philippines. That's a 1.4 gigawatts shown by Peter in the presentation. And the next year, we are fully committed to at least put one Maxeon 6 line into Fab 3 what then would bring us to a gigawatt of last technology status, and we have to see what we do about Maxeon 2 and further technology increases depending on the market situation and the demand. And of course, the readiness of Maxeon 7.

Great. Thank you, Markus. That's all the questions we have at this time for you. Next, we will have a pre-recorded video. From Yan Wang, our CEO of Huansheng Solar, our HSPV China JV. [Operator Instructions] Let's go with Yan's video now please.

Good morning, everyone. My name is Yan Wang. Now my position is -- I'm the CEO of Huansheng Solar of exactly patient period for Solar. I'm honored to join this visual meeting from China, and thank you to my host SunPower for inviting me. Today, I will give a brief overview for HSPV. First of all, I want to start that HSPV was founded in 2015, at the time winter between the GDS, some more and the local government at our base in Yixing, China. I should give a combine the respective strength of our shareholder, including [ bidding ledge ] for the model silicon wafer technology, silicon wafer based innovation and promise for China's strong supply chain and the best competitor. After we transport the shingled model technology from SunPower, we quickly run-up capacity to the 2 gigawatts. And in 2019 HSPV has become the world-leading shingle manufacturer. Earlier in this year, 2020, we are announcing a major competitive program. We will bring 2 new, 3 smart factory in Yixing and Beijing, respectively. This new factory design around our new G12 wafer format and utilize the high degree of the automation and the factory in Italy. IO is -- we plan more about this later in my presentation. Our goal with this new smart factory is to fully recognize what we believe to be the business advance in our shingled technology, and inventory become a global top 3 supplier. On this page, I will show HSPVs growth and the stability to build on the strength of its shareholders. TZS is the world leading mono wafer provider with over 85 gigawatts planning and operating model, single income wafer capacity. TZS has a history of pushing the leading age of the technology department. We were the first major wafer supplier to combine into the [ demo ] wire splicing. And also we're leading the industry in the highest seen impact wafers. And the most recently, we introduced our [ loosely muted ] cell 8-inch wafer for lines. Maxeon and this SunPower or well-known inventories. They are all massive IP profit and also particularly R&D capacity. The SunPower brand is very strong and is elaborated by their incentive global sales channels. Finally, we -- our Yixing government shareholders support our technology innovation and helps us to issue the healthy cell model and office. The Slide 4 show us its -- the market reach and achieve in only few years of our future. Since the start of production like when it was 3 years ago, we have become the -- by far, the leading supplier of shingle orders. We now have customers in over 60 countries. From the start, our sale is most of the geographies in solar, both of domestic and China market as well as the overseas customers, service some powers channels. District [ AOR ] Reasoned to renew the policy distribution. As you know, we're seeing a low write-off this life based upon some of the most well-known power plant developed in the world. In China, it's appeared we've also been several top runner projects with leading companies such as PS&C, [ StriGold ] and Hannon. We also found a partner to increase the party response [ entry ] project in Gungdong and in [ Opole ]. Globally, shingle models and business supply under SunPower brand, saw high profit projects on the 6 (sic) [ 60 ] countries. In this page, I want to see we are as a few ways, our focus on quality. We go under extensive model testing and have various strict qualification procedure for the module risk. We have received a significant number of [ computer ] awards increased the top run top performance from the well-known third-party, DNV-GL and dissecting our shingled panels over the top performance in all the 4 testing capacity includes PID testing for interesting design, closing cost by the using the in-cover panel material of the core manufacturing.PID has been called the performance here, number 1, and our P-Series modules ranking 4th among all the modules testing from the PID by DNV-GL. Recently, executive has a lot of great -- grand some -- received the Outdoor Energy Yield IMO Award (sic) [Outdoor Energy Yield AQM Award] from TUV and all the subject matter awards. Being the #1 in the mono facial group in the HSPV Quality Matters. Reviewed last used in the Rheinland panel materials, this is the design [ consequences ] and supervise manufacturing procedures. Also, we are looking closer on our unique flat shingled modules in this page. And this slide show the evolution of our flat over the past 3 years. During this period, we continue to increase the efficiency of our modules. We are in the new competitions. As you have seen, you were aware of the module size and types to address all the market from the residential rooftop to large-scale power plant. All these products have a common technology platform. We use a conical [ metric model ] solar cell, but interconnection, the patent use our unique patented projects. The design that stood out for our models is making communication and exception wafer products with better ability. If you see our efficiency and the performance. On this page, we take a closer to look at our listed products. The new P-5 official models use G12 format cells. They share the same base benefit of our previous shingle modules this include firstly, a robust shingle construction and once in confirmation is the high results under the smarter choice community and the PID. Secondly, a unique [ acquiring the security ] and mitigate help raise our -- increased energy production under the schedule and solving conditions. And finally, minimal white space to the Maxeon model [ A-15], lower BOS, the balance of the system cost. Unlike our previous products P-5 module committed only on the latest generation of the high efficiency module photo cell -- solar cells, mainly used TZS's new G12 wafer. This much larger 8 cell, 8 solar cells, leading the imitable -- the multiple cell device under each wafer. Let's making provider for the shingle module cost structure. In this way, our new P-5 modules incrementally levered the cost reduction and the position of the larger wafer. We are able to continue the synergies reduction without cell burning. This gave us to drive the cost reduction of well simulation to quite high power, high-value products. Before we talk any further about [ digital ] wafers, there's a reduction in the semiconductor industry, which give us low expenses. Since the early days of the middle 1970s, the industry transform from the new and large wafer platform after once [ decare ] with this platform driving the continued cost reduction. Practically, the solar industry has allowed this semiconductor industry trends by the least [ decare ]. Generally using a smaller wafer for such longer period, last August, TZS launched a revolutionary G12 wafer format, which we believe we are driving the next solar industry platform transfer to. As we can see by the trend on this slide, now, many of our colleagues agree delivering the large wafer platform that will be rapid adopted. Why we instruct the G12 wafer to drive the new solar industry technology model? Simply G12 side -- solar style will give Multi-Busbar module that are we more powerful and with higher efficiency and a lower cost. The bar chart on this slide show how wafer size and the module content technology determines module power and efficiency. All of the modules on this channel yields are down 2 G1 and 4 on G3 product as we want to be the 26 -- 72 cell [ hard cell ] modules in cell of equipment efficiency. You can see the large wafer allow for higher module of power rating with mono-PERC cells much better in the module efficiency and these G12 panels on the far right of the channel allowed travel -- for the power increase. But also [ mean for areas ] in the module efficiency. Of all the G12 panels, we expected the shingled product to have the highest efficiency. This page show the time line for the shingle module, technology following the development that is parallel. This slide provide context to have the -- explain our future plan. The shingle technology just underpin our projects what are developed by -- take relevant staff and then the continuum and which ones purchased by SunPower about 5 years ago. This combined continuous power team finished the development of the technology and development, the internal roof the content. 400-megawatt manufacturing operating inside one of SunPower's MAXN module factors. Shortly, of course, TZS and SunPower operators scout the technology in Yixing, China where the HSPV, our internal plan to have the capacity of 2 gigawatts. This was the fourth high objective of the shingle panels. And over the past 2 years, we had broke our both segment profitability and the strong market demands. Now it's time to scale this technology to the mainstream deposit. We really recently announced 2 external projects, one in Yixing near our factory and one in Tianjin, which our parent company, TZS has their hot [ copper ] In the main office. We will start with [ such life ] by building one [ review ] smart [ farm ] on each side. This factory will be highly utilized that will be utilized by a factory 4.0 and digitized and optimized the entire manufacturer value chain from the raw material logging, product assembly, testing and packing. The [ fourth preview was in Belvist ] in Yixing and well-known advanced and we also have already brought our products out, our fourth G12 modules were counted in the [ darkest supply ] and will keep basically at the forefront of solar modules technology at the time where solar power is becoming the world's leading source of new power. I would like to believe that the close cooperation between HSPV and SunPower to make the transition successful, we're looking for to continue our close cooperation with Maxeon technology. Finally, I would like to thank you for all the [ credits, meeting ] and how I have enabled a fewer players each other, HSPV and MAXN shingled module technologies.

I would like to thank Yan for his remarks. And now we'd like to show a short video of the highly automated 3 gigawatt HSPV smart fab that Yan just discussed. Can we go with that video, please? [Presentation]

Great. Thank you. Since Yan is not with us live, obviously, he's in China, if you could hold questions on his section until the formal Q&A session at the end of the presentations, that would be great. We'll be happy to answer those questions on. I'd now like to turn the presentation over to Joanne Solomon, CFO of Maxeon. Joanne? Joanne you there? We seem to be having some difficulties. We -- she is in the process of refreshing her screen. I apologize for the delay.

Bob, am I back?

We can hear you, Joanne.

Okay. Great. Thank you, Bob. Apologies for the slight interruption. I guess that's the joy of going last, your browser starts to freeze up. So I want to thank everybody for taking the time out of their day to learn about Maxeon. And I'll begin my presentation. Next slide. These certainly are exciting days to be in the solar industry and especially to be part of Maxeon. We have leading products that we and HSPV manufacture and we have access to a global sales platform to sell into DG rooftop and utility-scale projects. Top line growth, coupled with our improving cost structure, sets the foundation for us to achieve our target business model, operate the business cash flow positively and provide strong returns to our investors. Significant work has already been done to set the foundation for growing profitably. And I wanted to highlight a few of our accomplishments in 2019 and 2020. We have expanded our DG channels business and realized 9% growth in 2019 across Europe, Asia and the United States. We saw 140% growth in power plant business in 2019. With our differentiated product offerings, we realized strong ASP performance. Our factories made significant progress in pursuing operational transformation that led to both profitability and cash flow improvement. In 2019, we grew our premium position through the introduction of our Maxeon 5 product offering. We've been weathering COVID quite successfully by working closely with our supply chain partners, keeping our employees safe and continuing to shift to our customers throughout the pandemic. We reopened our factories after an 8-week hiatus. Our revenues for Q2 are an estimated $165 million, which is about a 40% decline from Q2 2019, but better than our original expectations. We're expecting continued recovery in Q3. I'd like to bridge our historical financial results, the strategic initiatives the team shared with you and our target business model. On the bottom left of the slide, you can see that, overall, we grew 30% in 2019. Gross margin and adjusted EBITDA included $145 million loss on the long-term above-market polysilicon contract. Solely normalizing for that loss, our gross margin was 12% and our adjusted EBITDA was $52 million or 5% of revenue. That contract is coming to an end in 2022, and the net remaining obligation is $220 million of which about $160 million is the above-market component. Now shifting to our target business model. You heard from the team on the great things that we have planned in the pursuit of top-line growth and the operational transformation. To highlight just a few. We're growing the top line by leveraging our premium brand and differentiated products. Our expansive DG channels will help us sell more beyond the panels and into more markets. Our performance line product gives us a high-performing product at a competitive cost for us to compete in the utility-scale market. Our cost structure is improving as we commercialize our next-generation IBC technology that lowers the CapEx per watt and improves our cost to manufacture by eliminating process steps. Our investors, Total and TZS, are great partners in pursuit of our goals. We will leverage TZS and HSPV's supply chain relationships and take advantage of our combined purchasing power. And we will control our operating expenses as we grow the top line. Maxeon is a Singaporean company, and our corporate headquarters and operating expenses will shift to Asia. With this shift, we started the process of eliminating about 90 U.S. position. It is certainly a bittersweet to separate with our U.S. team, and we thank them for their years of service. Not only will we benefit from lower cost labor, we'll have the added benefit of our leaders and managers centered in Asia and Europe. Next slide, please? After the spin-off, we will be well capitalized to support our growth. We will receive a $298 million equity investment from TZS, which is based on a $1.03 billion valuation. We are closing on our $200 million convertible bond on Friday, with the net proceeds of over $150 million after funding the prepaid forward. We will have $137 million of undrawn bank debt, and we'll spin with $50 million of cash and $38 million of drawn debt. At closing, we'll repay $100 million promissory note to SunPower and we'll pay $25 million of spin-off related expenses. So after all those transactions, we have $374 million of pro forma cash and $137 million of available liquidity under the bank facility for combined cash and liquidity of over $500 million. Next slide, please? Our balance sheet will be strong. We'll manage the business to be cash flow positive. We will quickly get the legacy liabilities behind us. This slide is very similar to the prior slide and lays out the sources and uses of our cash. I wanted to share with you our capital investment plan. In 2020, we expect to invest $75 million. In 2021, $160 million; and 2022, $150 million. Our investments are to support the refresh of our IBC capacity, research development and the performance line expansion through an investment in HSPV. To clarify, HSPV is very much self-funding and has access to financing in-country in China. Any investment we make will be to show our commitment as a 20% minority shareholder and the importance of the output of those factories to support our growth. Next slide, please? I wanted to give you 2 cuts at our historic revenue performance. First, based on our end markets of DG rooftop and large-scale projects and then second by product technology. Regarding end markets. Overall, our revenue dollars in 2019 grew by 30%. For large-scale solar, we saw 140% growth in 2019 with several projects throughout the globe. In Q1, while the number of active power plant projects is up, our revenues were down largely on the timing of deliveries. While we saw significant growth in 2019 in large-scale solar, we were capacity constrained, which in turn constrained further growth. With HSPV's P-5 expansion to 8 gigawatts, we will see large-scale solar increase as an overall percentage of our revenues. For DG rooftop, we saw strong growth in both EMEA and APAC regions in 2019. And in Q1, we saw double-digit growth in North America, Europe and Japan. Going forward, our DG rooftop business will grow as we go deeper into existing channels and wider as we add new regions. We will expand beyond the panel, adding microinverters through our Enphase partnership and then into storage. Our rooftop business growth will also be supported by added performance line capacity. Next slide, please? We saw significant growth in our performance line products for both large-scale and DG rooftop end markets. Maxeon 5 was successfully launched in the U.S. market, and Maxeon 3 remains our powerhouse and did very well in the U.S. and Europe. The share of Maxeon 2 will reduce as we commercialize next-generation IBC product offering and the growth and performance line. From a gross margin perspective, after the refresh of our product lines in Malaysia, we expect to see margins in the 20s for our IBC products. For performance line, our gross margins are expected to be in the low teens, given the concentration of power plant customers and sharing of the margin with HSPV. That said, our performance line is less operating expense intensive. Next slide, please? This slide is a recap of our historical financial information and the reconciliation of our GAAP results to our non-GAAP results. Our 20-F is publicly available now, and you will be able to find it on the SEC's website under our ticker symbol, MAXN. And you can also find it on the maxeon.com website. Next slide, please. In closing, I'd like to recap our expected path to financial success. With our premium brand and deep channels, we will drive expansion of our portfolio beyond the panel and into more markets. We expect profit growth and to benefit from improved capital efficiency with both performance line products through the JV, and our next-generation Maxeon IBC technology. Our cost structure will also improve by leveraging TZS and HSPV's supply chain relationships and our combined purchasing power. We are shifting our OpEx to Asia and expect to benefit from greater efficiency and labor cost savings. At the spin-off, we'll be well capitalized with over $500 million in cash and liquidity. We will manage the business for positive cash flow and drive returns for our investors. I will answer questions during the general Q&A session. And now I'd like to turn the presentation back over to Jeff for his summary remarks.

Great. Thank you very much, Joanne. So first, I want to thank all of you for your patience. Hopefully, it goes without saying that we would love to be physically present with you all in Manhattan doing this presentation. But obviously, we hope and pray that we'll have those opportunities in Manhattan and we hope and pray for that for the rest of the world as well as we all emerge from the pandemic. But I think from a technology perspective, we're all learning to live with virtual meetings. And again, I appreciate your patience. If -- let me go to the next slide, if there's anything that I could wish for from takeaways for you all from the last few hours of presentations. It's that we really do have a great and unique growth story within Maxeon. I mean it starts with a strong growth platform. We have a global premium brand within renewable energy. And it comes from decades of hard work and effort and differentiation with the world's best panels and also building up a great global channel of dealers. And that has enabled a global footprint in over 100 countries. So we are known everywhere with a great reputation for quality and capability and performance. That platform is very unique and very valuable. And with it, and we went in some detail on these, we can talk about growing beyond the roof, right? Microinverters with our partner Enphase starting today. But soon, you'll be hearing plans from us around storage and around services. Expansion to new growth markets, right? When markets -- when a market like Mexico starts to emerge as being a good solar growth market, we're already there with a playbook. We've got dealers in place, and we're there positioned to help bring Mexico even more quickly into the solar era. This is also going to lead to growth in power plants. And Peter Aschenbrenner went over that in some detail, but this is an opportunity for us to transform, again, to become a big player from an operational and supply chain perspective, but also to bring financial scale to us. This is a company that's going to be borne from, as I said in the beginning, borne from that marriage of Silicon Valley innovation in China, scale and capital and operational knowhow. And then we're going to couple that as well with a great -- our center of excellence for marketing in Europe, right? One of the hotbeds for solar development. That's where we do the majority of our marketing thinking. So we've really looked -- and you can think about Maxeon, looking across the world that it's taking the best of what the world has to offer in solar to drive success. And I'd be remiss if I didn't mention the great operations that we have, and not just in China with the joint venture, but also throughout Southeast Asia with our plans for IBC and also with our Modcos that exist within Mexico. So a strong global player with a lot of great opportunity for growth. With that, we're now going to open it up into the general Q&A. And we actually have all of the staff available. I will take all the incoming questions after Bob reads them through, and we'll go from there.