Only a day after its Analyst Day in New York, SunPower published an SEC filing that highlights two significant trends in the U.S. solar market: the wall of money that is looking for predictable returns from solar, and the increasing ability of third-party solar companies to monetize portfolios of distributed assets.
SunPower has entered into an agreement to sell its interests in companies that hold leases for solar assets, under sale-leaseback financing agreements with banks, to a subsidiary of Goldman Sachs. Under the agreement SunPower will pony up its interest in 233 MW of projects spread across roughly 200 locations in nine states for $87 million.
This is the latest in a long line of sales of pooled distributed solar assets. SolarCity completed the industry’s first securitization three years ago, but most of these transactions that pv magazine has seen to date have been for residential installations, not commercial and industrial (C&I) projects.
These transactions help third-party solar owners overcome a chief challenge of their business model: the need for more funding to go out and develop more solar. In the case of SunPower, the company has been in a challenging economic situation for years. Even after selling off a pool of residential leases, its utility-scale development business and its microinverter line, the company had fallen to only $351 million in cash by the end of the year.
But this could also be more fuel for growth. SunPower has retained its position as the top C&I solar developer in the United States, according to Wood Mackenzie’s latest assessment, and through the work of its installer network also rose to the position of the 2nd-largest residential solar company in the United States.
It remains to be seen where the company goes from here, and whether it can attain an elusive profitability to support its technological advantages. The company has made it this far, and as SunPower has noted, it has been in the game longer than just about anyone.
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