Solar Industry Shining Bright After Vivint-SunEdison Deal | Wall Street Daily

The solar industry continues to shine both domestically and globally, despite falling prices for traditional fossil fuels.

Utah-based Vivint Solar, Inc. (VSLR) has grown quickly over the last few years and is now one of the largest U.S. residential solar installation companies. It has around 523 megawatts of contracted rooftop solar assets built or under development.

Vivint went public in late 2014, and has financed and installed over 40,000 solar panel systems as of the end of March 2015.

Before the Opening Bell this past Monday, Vivint’s stock surged on the announcement that it was being acquired by clean energy giant SunEdison, Inc. (SUNE) and its subsidiary, TerraForm Power.

SunEdison and TerraForm Power plan to pay $2.2 billion in a combination of cash and shares of SunEdison common stock and convertible notes.

The deal, which highlights how quickly the market is growing for rooftop solar panel systems, is expected to be a trifecta of success – a win for all parties.

Sharing the Light

For clean power giant SunEdison, the deal helps its expansion plans in the solar energy space both for residential and commercial buyers.

TerraForm Power is in the position to acquire actual solar projects from Vivint Solar, both the ones already built and projects in development. It can do so as the company is structured as a yieldco, meaning it’s a publicly traded company that bundles together the assets, in this case, of clean energy projects based around the long-term and predictable revenue generated by the reoccurring energy payments.

And, of course, Vivint and its shareholders are receiving $16.50 per share as part of the deal.

Ahmad Chatila, the CEO of SunEdison and Chairman of TerraForm Power, related that buying Vivint is part of the companies’ plan to become a major power provider.

“SunEdison’s acquisition of Vivint Solar is a logical next step in the transformation of our platform after the successful execution of our First Wind acquisition in January 2015,” said Chatila in a statement.

“[As] of the fourth quarter of 2015, our organic growth and recent acquisitions will put SunEdison on track to deploy more than 1 gigawatt per quarter,” he went on.

SunEdison also raised its 2016 annual guidance for production to between 4,200 and 4,500 megawatts – a 50% increase!

But SunEdison goes far beyond just energy production. The company has become a full-fledged financial services company, offering everything from asset management, to billing and reporting, to tax and audit services.

The Pioneer Outsourcer

SunEdison became a household name in the early 2000s as it was the first company to successfully introduce the “solar-as-a-service” model developed by the well-publicized entrepreneur Jigar Shah.

Shah’s model offered residential customers rooftops solar panel systems with little or no money down. The model generates income by charging customers a monthly energy bill, similar to any other utility.

Prior to the introduction of this model, solar customers were required to pay upfront for their solar panels, which, at that time, cost upwards of tens of thousands of dollars and can still be a hefty investment for today’s homeowners.

The model became such a success that in 2009, the large silicon wafer and solar module producer, MEMC Electronic Materials (an arm of Monsanto [MON]), acquired SunEdison, demonstrating how lucrative this new potential model could become. MEMC later decided to focus growing its business around clean energy. Thus, in recent years, it adopted the name of SunEdison.

Solar Sector Having Its “Day in the Shade”

Now, over a decade later, many solar companies have replicated this model to share the space with Vivint, including SolarCity Corp. (SCTY), the U.S. leader in both solar financing and installation, as well as privately held Clean Power Finance and Sunrun.

SunEdison also recently acquired a wind energy project in India, along with First Wind, one of the largest wind energy developers in the United States.

Plus, the U.S. solar panel industry broke records in the first quarter of 2015 in terms of the total number installed. The industry reached 437 megawatts of solar panels on home rooftops, a 76% increase from Q1 2014, according to the Solar Energy Industry Association.

Over the next five years, another three million new home rooftop solar systems are expected to be installed in the United States. The biggest companies are trying to expand vertically across the sector, structuring additional kinds of businesses in order to lower their costs.

In sum, this new acquisition reflects increased consolidation in a growing market. The bigger companies with deep pockets will continue to fight for rooftop space that can apply solar panels more effectively and economically than ever before.

The acquisition requires approval by Vivint stockholders and will face reporting requirements. But the deal is expected to close in the fourth quarter of 2015.

Good investing,

Shelley Goldberg

Shelley Goldberg is a global resources, commodities and environmental sustainability strategist with over 20 years of sector experience in energy, metals and mining, agriculture, and infrastructure. Learn More >>

Solar Industry Shining Bright After Vivint-SunEdison Deal | Wall Street Daily

Solar thermal: the dark horse in renewable energy | The New Daily

The Abbott government is pushing the renewable sector away from wind farms and towards gigantic solar towers.

Thousands of sun-tracking glass mirrors encircled around a tall, glimmering obelisk in the desert – it sounds like something out of a sci-fi movie, but solar thermal towers are being touted as the next big thing in renewable energy.

With this week seeing the Australian Renewable Energy Agency (ARENA) set up a dedicated big solar program and the federal government controversially banning the Clean Energy Finance Corporation (CEFC) from investing in wind farms or rooftop solar projects, these massive sun-soaking skyscrapers have suddenly shot to the front of the queue for funding.

Environment Minister Greg Hunt and Finance Minister Mathias Cormann have both lauded the benefits of “big solar” – which also includes conventional large-scale solar PV plants – but those within the solar thermal industry have mixed emotions about the government’s support.

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Environment Minister Greg Hunt has been talking up ‘big solar’. Photo: AAP

Dr Keith Lovegrove, head of solar thermal at renewable energy consulting company ITPower, told The New Daily that while he saw contradictions in the government’s approach to renewable energy, it ought to be given “the benefit of doubt” over its enthusiasm for super-sized solar projects.

“Solar thermal is globally growing at 30 per cent per annum – the same rate as PV – and accounts for a bit under 10 per cent of the world’s solar energy,” he said.

“It would be rather good if Australia got on board as well.”

There are a number of different types of solar thermal towers, but the type gaining the most momentum in Australia produces power by reflecting the sun’s energy off mirrors onto a central structure containing molten salt, which is heated to temperatures of over 500 degrees Celsius and pumped into steam generators.

Dozens of towers have been completed or are under development around the world, including the US, Spain, China and Turkey.

A costly proposition

The trouble is, these elaborate towers are very, very expensive, and when assessed on a dollar-per-kilowatt basis they can’t compete with regular solar or wind power.

Dr Lovegrove argued, however, that the technology is still at the top of its cost-development curve and is getting cheaper by the year.

The government has pushed wind power to the bottom of its list of energy investment priorities as part of a deal with crossbench MPs.

He also said that solar thermal could provide something other forms of renewable energy could not offer – a guaranteed energy supply.

The molten salts heated up by the sun can retain the heat even when the sun stops shining, as opposed to conventional solar or even wind farms that require the wind to be blowing.

“Cheaper variable renewable options are great, but solar thermal is an important part of the future energy mix,” he said.

RePower Port Augusta is campaigning for solar thermal to replace the South Australian city’s ageing coal-fired power stations, which are set to be mothballed by 2018 at the latest.

Campaign manager Daniel Spencer said the owner of the coal plants, Alinta Energy, was conducting a feasibility study into the idea but after initial projections indicated a $577 million price tag for a 50 megawatt plant, the early signs were the company would not go beyond that.

Spanish firm Abengoa, winner of a $450,000 ARENA grant for a study into a 20 megawatt solar tower power project at Perenjori in WA, has also shown interest in Port Augusta, as has Solar Reserve.

After campaigning heavily against the cut to the RET, Mr Spencer was cautious in welcoming the federal government’s professed support for the sector.

“We do support government investing in big solar, but we want to make sure other renewables aren’t shafted in the process,” he said.

“We’ll follow up the opportunity and try to make something happen in Port Augusta, but we’re sceptical – there is certainly a lack of trust.”

Solar thermal: the dark horse in renewable energy | The New Daily

Dennis' Daily Report: SEN. BOWMAN AND WIND ENERGY

LEGISLATIVE EFFORTS TO ENCOURAGE IOWA’S WIND ENERGY ECONOMY ARE  HELPING CREATE JOBS ACROSS IOWA.   ROB HACH OF ALTA, IOWA, FOUNDED A COMPANY THAT  HAD 7 ENPLOYEES WHEN THE 2008 RECESSION HIT AND THEN GREW TO A WORKFORCE OF 33 TODAY.    SEN. BOWMAN OF

MAQUOKETA TALKED WITH HACH AND ROGER LUTES, A MARSHALL COUNTY FARMER WORKING TO LAUNCH A WIND FARM ON HIS LAND, AT THE IOWA

STATEHOUSE WEDNESDAY.   LEFT TO RIGHT, HACH, BOWMAN AND LUTES.

ANY QUESTIONS ABOUT WIND ENERGY, TALK TO SEN. BOWMAN.

PHOTO CONTRIBUTED

DENNIS VOY

Dennis" Daily Report: SEN. BOWMAN AND WIND ENERGY