SunEdison balloons pipeline in Q2

Investors cheered SunEdison’s first set of quarterly results since spinning off its yieldco and semiconductor units, as the US solar giant revealed a big expansion in its project pipeline and promised heady growth ahead.

SunEdison, which develops and acquires PV assets ranging from smaller distributed systems to huge ground-mount projects, completed 218MW of capacity during the second quarter.

However, the company added 684MW to its pipeline, lifting it to 4.3GW.

SunEdison now has a backlog – or projects with an executed off-take agreement – of 1.1GW, and nearly 500MW under construction.

Last month Missouri-based SunEdison launched its yieldco, TerraForm Power, in which it holds a 64% stake.

Some market observers have expressed concerns that as the number of US-based renewables yieldcos grows, it will become increasingly difficult for companies like TerraForm Power to acquire well-priced projects.

Earlier this week Pattern Energy, a wind-focused yieldco, acknowledged that it will need to rely more heavily on its own development pipeline, as many third-party assets look overpriced.

But SunEdison chief financial officer Brian Wuebbels dismissed such concerns, pointing in particular to international markets as offering huge scope for growth.

“The momentum [for our pipeline] is excellent,” Wuebbels told analysts on Thursday. “We continue to see projects coming our way.”

“We see that the acquisition opportunities for early-stage projects, now that we have a well-known, low-cost offtaker on the back end [in TerraForm Power], are dramatically improving and increasing," Wuebbels said, pointing to opportunities "both from third-party acquisitions as well as development partners”.

“The growth outside the United States is [coming] even faster than in the US, which is really outstanding,” he adds. “I don’t see us slowing down.”

In recent weeks SunEdison nailed down project finance for a 73MW PV project in Chile and expanded its partnership in China with local developer Huantai.

Shares of SunEdison rose more than 15% in early trading on Thursday, with investors apparently unconcerned about the company’s quarterly operating loss of $108.7m – more than double the $46.6m operating loss it reported during the year-ago period.

The company’s operating deficit was due in part to its shift to retaining more finished projects on its own balance sheet, with the intention of “dropping down” many of them into TerraForm’s portfolio in the future.

The company’s quarterly result was also hit by expenses related to the May initial public offering of SunEdison Semiconductor, which raised $98.2m in net proceeds, and the July IPO of TerraForm Power, which raised $159m.

SunEdison’s net loss for the quarter was $41.2m, coming on revenues of $646.2m. That compares to a net loss of $102.9m and revenues of $401.3m during the second quarter of 2013.

Wuebbels reaffirmed SunEdison’s intention to initially retain around 50% of the capacity it brings online on its own balance sheet, but eventually grow that figure to 70%.