SEEKING ALPHA - 8point3 Energy Partners (NASDAQ:CAFD) is a solar yieldco formed by First Solar (NASDAQ:FSLR) and SunPower (NASDAQ:SPWR). It is a limited partnership formed to own, operate and acquire solar projects developed by First Solar and SunPower wherein they own 31.1% and 40.7%, respectively.

The initial portfolio consists of 432 MW of solar projects, of which only 300 MW are commissioned. 8point3 is the second major solar energy yieldco to be listed after Terraform Power (NASDAQ:TERP) by SunEdison (NYSE:SUNE). SunEdison is fast expanding and has become the renewable energy leader globally, transferring quality projects to Terraform which also has expanded slowly into wind energy. CAFD is different from the TERP since it has been formed by two leading solar companies in the US. The stock was listed on Nasdaq on June 22nd at $21, however it lost 15% of its value in 20 days since then.

Though the yieldco is still in its early stages, I'm not very bullish on the stock given the quality of the projects being transferred to CAFD and the low yield offered.

Summary

  • High return DOE-funded projects have not been transferred to the yieldco.
  • First Solar and SunPower should have transferred more late stage projects to the yieldco.
  • All projects are US-based where the rate of return have been declining.
  • The valuation seems high. Stock has lost 15% since its IPO.

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