SunPower edges towards yieldco

SunPower will increasingly develop major PV projects around the world alongside majority shareholder Total – including in China – and may eventually drop down many of those projects into a yieldco, the company said on Thursday.

In the past SunPower and many other mega-PV developers have sold projects long before completion – as SunPower did with MidAmerican and its 579MW Solar Star projects (formerly known as Antelope Valley).

But the company will increasingly hold onto projects for longer – in some cases through the end of construction, and increasingly into operation as an independent power producer, SunPower executives explained in a conference call.

SunPower currently has 517MW of PV capacity on its own books, including the under-construction Henrietta and Quinto mega-projects in the US (rated at 100MW and 110MW each, respectively) and 172MW of residential capacity built up via its solar-leasing arm.

Over the next two years the company will continue adding utility-scale and residential capacity in North America to its books, as well as commercial-rooftop projects in Japan and Europe, says chief financial officer Chuck Boynton.

Meanwhile, over the medium term, "we will look at adding jointly developed projects with Total in top-tier countries around the globe, and potentially leverage significant growth through our footprint in China,” Boynton explains.

SunPower revealed that its partnership with French oil supermajor Total -- which acquired a majority stake in the company in 2011 -- has already resulted in more than 300MW of booked projects for SunPower, with chief executive Tom Werner adding that the two companies are “jointly pursuing many more projects in a number of promising emerging markets”.

Holding onto projects for longer dents SunPower’s earnings in the short term, but significantly boosts them over a longer time horizon – a luxury the company increasingly finds itself able to afford.

SunPower, the second largest US manufacturer of PV modules after First Solar, today reported a net profit of $65m for the first quarter, compared to a net loss of $54.7m during the same period last year.

SunPower will make a final decision on whether to launch a yieldco vehicle on the public markets – following rival SunEdison, which is currently investigating the option – in late 2015 or early 2016, executives said today.

In the meantime, it may sell completed projects to the growing body of other yieldco companies in the renewables industry.

SunPower also noted the “increased traction” its C7 Tracker technology is gaining in China, where the company and a trio of local joint-venture partners are currently installing 120MW of C7 capacity, due on line in 2015.

Werner notes that the Chinese solar market is “bigger than the sum of the next two countries… and we expect it to grow faster”.

The Middle East also represents a major opportunity for SunPower when paired with Total’s connections in the region. However, “our sense is that the large opportunities there are still a few years off”, Werner says.

SunPower confirmed today that construction at its new 350MW cell plant is on track in the Philippines, and says it will make a decision on whether to build a much-larger fifth facility – Fab 5 – “within the next few quarters”in an as-yet-undetermined country.