Out Of One, Come Two. Yesterday Sunpower announced that the company will be splitting into two separate entities. By bringing in $298mm in new capital into the module manufacturing business, Maxeon Solar is born. Maxeon will take over the manufacturing side of the Sunpower business, based in Singapore, and trade on the NASDAQ. The $298mm investment comes at a valuation of ~$1bb and is made by China’s TZS Zhonghuan Semiconductor. The transaction was unanimously approved by the board and is expected to spin off in Q2 2020. Maxeon will retain exclusive supply to Sunpower in the US and Canada. For more on this transaction, Sunpower was kind enough to explain it all in this presentation.
The Downstream Play. Sunrun, Vivint Solar and Sunnova have a new publicly listed competitor. Sunpower is now fully committed to the DG segment. Slide 31 of the above presentation shows that we are thinking the same thing. Sunpower is also telling shareholders that they think they should be valued closer to $3bb from the $1bb they are currently trading at which is the entire purpose of this split. Sunpower has a tremendously loyal dealer network that co-brands their companies as ‘by Sunpower’ which is a powerful marketing tool. There is still some work to be done but in a world where module and inverter supply is constrained, Sunpower dealers now have priority supply agreements with Maxeon and Enphase.
Changing New Home Solar. Here is the scoop about the work around that the utilities and some home builders are trying when it comes to the new home solar mandate. To start, an important note, home builders have no additional cost to add solar to the new homes. Solar financing companies will cover those costs for the builder and still pass along savings to the new home owners. Through a filing by SMUD, they are attempting to let home builders achieve the requirement for solar by allocating the homes to solar farms labeled as ‘community solar’ well away from the community. This will in no way help achieve more distributed generation and allow the future of micrograms to be built out. As the California Energy Commission votes on this proposal on Wednesday, it appears that the California home builders association is split on this. One of the largest homebuilders, Lennar, is against this broad proposal to eliminate the rooftop solar mandate and is expected to speak out against it at the hearing.
- Greentech Media: SunPower to Spin Off Manufacturing Business in Major Strategic Shift
- Los Angeles times: California might not require solar panels on new homes, after all
- Business Insider: Climate events have cost the US economy more than $500 billion over the last 5 years, Fed official says
- PV-Magazine: Two programs launched to get veterans working in solar
- Post and Courier: SC utilities and solar builders at odds over price for power contracts
- PV-Tech: Acciona boosts profit margins as installed solar portfolio triples
- Renew Economy: Negative pricing events hit record levels as solar takes big bite out of coal
- Utility Dive: California proposes extending 4.8 GW gas capacity as bridge to 3.3 GW of new clean energy by 2023
Opinion
Best, Yann