The following is an excerpt from the September edition of PVNews:
The March issue of PVNews featured downstream acquisitions across the vertical solar value chain. Between February 2010 and January 2011, five project development companies were purchased by larger, upstream players (LDK-Solar Power Inc, First Solar-NextLight, Sharp-Recurrent Energy, OCI-Cornerstone, and Enfinity’s-ClearPeak, which is the only exception to this as Enfinity is a developer). Just recently MEMC/SunEdison, which boasts an impressive pipeline and installation record itself, scooped up both Axio Power and Fotowatio Renewable Venture’s U.S.-based subsidiary.
Since 2006, well over $2 billion has been spent acquiring developers and/or their pipelines, but has it been worth it? With the $2 billion in developer and pipeline acquisitions also comes over 1.5GW of contracted and 4GW of pre-contract projects in the U.S. Relative to the size of the US commercial and utility markets in 2010 (619MWdc), these are massive figures. Though the domestic solar market has grown rapidly in the past few years and is expected to do so through 2015, do these companies anticipate even bigger growth or is this a case of just keeping up with the Joneses?
Comparing all of the acquisitions detailed in the table below, it is clear that multiple strategies have been employed by acquirers. Early movers, such as First Solar (OptiSolar) and SunPower (Powerlight), have seen the acquisitions they made back in 2006 start to come to fruition, with large projects connected in the last year. Both of these firms bought developers with late-stage pipelines, and these qualifications are represented in the high purchase prices. First Solar has continued this approach through to the present with the recent purchase of NextLight Renewable Power; MEMC and Sharp pursued a similar strategy with their acquisitions of SunEdison and Recurrent Energy, respectively...
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