We’re about to get another Yieldco, those fantastic investment vehicles that allow all of us to buy stock in operating solar and wind farms.
This one is particularly exciting because it’s a joint venture between the two largest solar developers in the US – First Solar and SunPower. It’s the first Yieldco to focus solely on solar energy assets.
Until now, they have sold solar plants after building them, but putting those assets in a Yieldco instead will allow them – and investors – to profit from the projects over the long term. Revenue from 20-25 year power purchase agreements funds new projects (greatly lowering their borrowing costs) and provides dividends for investors. And that’s from the sale of solar electricity!
First Solar has about 755 megawatts (MW) of projects to roll in this year, and a pipeline of more than 2.6 gigawatts (GW). SunPower has 640 MW to roll in, with pipeline of 4 GW. Out of the gate, the Yieldco would be valued at as much as $2.8 billion, says Deutsche Bank analyst Vishal Shah in a briefing note.
No details have been released on the upcoming IPO, but we’ll let you know when it is announced.
Here’s an article that describes the other Yieldcos – since it was written, two more have gone public: Abengoa Yield and SunEdison’s Terraform Power.
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