Tempe, Ariz.-based utility scale energy leader First Solar Inc. (FSLR) reportedly wants out of its “yieldco” joint venture with commercial and residential solar panel maker SunPower Corp. (SPWR). Separately, San Jose, Calif.-based SunPower says it is exploring strategic alternatives for a yieldco venture called 8point3 Energy Partners (CAFD), which saw its shares close down 8% on Thursday at a price of $12.15 per share, recovering from a 13% dip in early morning trading. As First Solar sells its stake in CAFD, SunPower’s review brings about uncertainty over the future of the venture, which could see a new co-sponsor, liquidation or sale. (See also: A Look at Solar Energy Earnings.)
8point3 Energy Partners was founded in 2015 when income-minded investors were highly optimistic over a type of publicly traded entity called a yieldco. Yieldcos house solar and wind projects, intended to produce predictable cash flow through long-term contracts and pay them out as dividends. In the past, investors wary on the risks of fairly new alternative energy stocks saw yieldcos as a potentially less-volatile option. Interest quickly waned, however, when SunEdison filed for bankruptcy last year.
First Solar to Focus on Restructuring Initiative
Amid the start of a costly restructuring, First Solar says exiting the yieldco will allow the company to allocate more capital to streamline the production of its cost-effective Series 6 Module solar system. As solar energy leaders have seen their shares beaten down over market uncertainty, the election of Donald Trump and declining solar prices taking a hit to contracts and revenues, First Solar says its next-gen model will please shareholders and boost long-term profitability. (See also: How First Solar and SunPower Differ.)
Shares of First Solar, closing up 0.2% at a price of $26.62 on Thursday, reflect an approximate 56% year-over-year (YOY) decline. SunPower also saw its stock gain on Thursday, up 0.7% in the trading session and 71% YOY at a price of $6.22 per share.
After sinking on Thursday, 8Point3’s stock has lost 42% of its value after the company went public in June of 2015 at a price of $21 per share.