REC post $180m in Q4 revenue, extends US supply deal with Sunrun

Norway’s REC Solar ASA on Wednesday posted fourth-quarter sales of $180 million, up more than $30 million from the previous quarter. Net profit in the period climbed 7% sequentially to $24.1 million.

REC Solar CEO Martin Cooper attributed the positive results to stronger sales volumes in Europe and the United States, which helped boost module sales by 18.5% over the previous quarter to $176.6 million. The company also announced it was extending its existing supply deal with U.S. residential solar group Sunrun. REC’s module production likewise rose sequentially, climbing 3.8% to 258 MW.

Cooper welcomed the reduction in solar panel cash costs achieved in the quarter and said the company would continue to focus on cost reductions going into 2015. Solar panel cash cost was at about $0.60 per watt peak in Q4, down approximately $0.02/Wp from Q3.

The company added that its panel price dropped 7.2% from third-quarter levels due to unfavorable currency development and increased sales to the utility segment.

In January, shareholders approved the sale of the company to Bluestar Elkem, a division of the state-owned China National Chemical Corporation. REC said Bluestar Elkem had not yet received the necessary Chinese regulatory approvals required for closing the transaction.

Recent developments

Meanwhile, REC’s recently appointed new CEO, Steve O’Neil, will take the helm March 25. Other recent developments include a deal signed in February to sell a majority of its shares in REC Solar Commercial Corporation to Duke Energy. Following the sale, REC will hold 7.6% stake in the unit.

REC, Sunrun extend U.S. supply deal

REC and Sunrun expanded a supply agreement originally signed last year. According to the deal, Sunrun has committed to buy 100 MW of REC’s high-performing Peak Energy solar panels, with deliveries scheduled throughout 2015.

"Our original panel supply contract with Sunrun called for a minimum of 50 MW, with an option for up to 100 MW, so this doubling of volume underscores the solid relationship between the two companies and our position in the U.S. residential market," said Arndt E. Lutz, REC’s senior vice president and managing director of its North American business.

Paul Winnowski, Sunrun’s chief operating officer, said the agreement enabled Sunrun to "provide consumers with the best and most reliable solar panels on the market for their home solar system."

The extended deal is the latest in REC’s string of major panel supply agreements and installations in the U.S. market. REC has signed 703 MW of long-term supply agreements for the residential, commercial, and utility segments in the U.S. since May 2014. The company is also expanding its production capacity to 1.3 GW at its vertically integrated Singapore manufacturing facility.