Solar Industry Consolidates… Corporates Increase Involvement
2015 is off to a good start for residential and commercial scale solar companies. Dollars and partnerships are making daily news and one can easily notice the increasing consolidation of the sector.
In these recent deals, corporations are very much involved. The latest on the record is Apple’s impressive off-take agreement of $848 million for solar power from First Solar’s 130-MW California Flats Solar Project in Monterey County. This 25-year Power Purchase Agreement is Apple’s fourth solar farm project, adding to Apple’s Data Center projects in Arizona, Reno and Maiden. In the commercial segment, another noteworthy deal is Duke Energy’s acquisition of a majority stake in REC Solar. After Sunrun acquired its residential business last year, REC Solar has been focusing its activities on sales and financing process for commercial-scale users. Through this acquisition and by investing a further $225 million in REC Solar’s solar projects, Duke Energy is contributing to the acceleration of the solar market consolidation, and the expansion of solar companies’ activities to energy services. This consolidation also extends into the system operation and maintenance (O&M) segment. For instance, inverter manufacturer Enphase Energy’s acquisition of Next Phase Solar enables the company to scale its O&M services. NRG’s acquisition of Verengo Solar’s Northeast Sales and Operations team is another example, this time in the growing residential solar market segment.
Last but not least is the acquisition of Recurrent Energy by Canadian Solar for $247 million in cash, which shows upstream solar manufacturers are moving downstream to capture some value in installation and project development. This trend was first initiated by First Solar and SunPower, and later by MEMC’s acquisitions of SunEdison and Axio Power, as well as by Hanwha’s downstream business.