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SunPower set to think big as Total juggernaut rolls into solar

Total’s 60% acquisition of SunPower puts the California-based company in pole position as the global PV market shifts back towards utility-scale projects, industry insiders say.

The successful closure of the sale, announced today, saw the world’s fifth-largest independent oil company pay $1.37bn for a controlling stake in PV manufacturer and developer SunPower.

The deal is among the most significant in the solar industry’s history, and the French oil and gas major is expected to be first in a long line of traditional energy companies piling into the PV sector.

Total, which also recently bought the remaining 50% stake in French module maker Tenesol, is understood to have evaluated more than 200 PV companies before making an offer for SunPower.

The advantages of the deal for SunPower are myriad. In addition to gaining access to the 130 countries in which Total operates, SunPower will be given a $1bn credit line to expand its business.

“Surely, this gives us more options – especially in the large-scale, international business,” SunPower managing director Jörn Jürgens tells Recharge.

After a period in which the industry’s focus has largely shifted towards rooftop installations, analysts believe the market is poised to swing back forcefully towards utility-scale projects as the sector moves closer to grid parity.

“In the long term, this inevitably becomes a utility-scale business,” says the chief executive of one major European PV developer.

“As that happens, the winners will be the guys with access to big balance sheets and cheap capital,” he tells Recharge.

“You’ll start to see a lot more deals like SunPower. It’s a hugely good thing for them.”

In the shorter term, some analysts worry that SunPower is not reducing its module costs fast enough, given the tremendous price pressure emanating from China.

SunPower is known for selling some of the most efficient – and expensive – modules available.

But Jürgens shrugs off such concerns. “Our product is more difficult to make and will always be more expensive than a Chinese module, but we’re following the cost curve as well as anybody else.”

“We’re serving a market segment which the Chinese cannot serve – 20% efficiencies versus sometimes 14%,” he says.

“Our customers are focused on quality. The people who buy BMWs will buy our modules.”