During the past two years over $16 Billion has been invested in the US in Renewable Energy Yieldcos. But some of these stocks have lost almost 50% of their value - so what’s the real story? Were Yieldcos hyped up or do they still offer a sustainable equity financing model in the US?
According to the third edition of North America Renewable Energy Brief from US national professional services firm CohnReznick LLP, yieldcos have raised $19 billion through IPOs, secondary offerings, and various debt instruments over the past two and a half years.
On a podcast recorded on September 14th, I said I thought that Yieldco stocks had bottomed at the end of September. Two weeks later, that call still looks like a good one. I'm starting to hear optimistic noises from other Yieldco observers, although the general tone remains quite bearish.
BLOOMBERG - Acciona SA, the Spanish construction company that’s one of the world’s top owners of renewable power plants, ruled out forming a yieldco to absorb some of its developments, saying more of its growth will come from solar photovoltaics.
Two of Europe’s largest utilities are avoiding investments in yieldcos, a business model that has raised $28 billion for the renewable energy industry, citing volatility in market conditions and pressure to keep the businesses growing at all costs.
SOLARSERVER - 8point3 Energy Partners LP (San Jose, California, U.S.), a limited partnership formed by First Solar, Inc. and SunPower Corporation, on September 30th, 2015 announced financial results for its third fiscal quarter ended August 31st, 2015.
24/7 WALL STREET - For many reasons, one asset class that has taken an absolute beating this year has been the alternative energy stocks, and right in line with top solar stocks have been the yieldcos. A new research report from JPMorgan takes an interesting angle on what investors can do with three of the top yieldcos that have been absolutely eviscerated.
BLOOMBERG - Trina Solar Ltd., the world’s biggest manufacturer of photovoltaic panels, plans an initial public offering of a “growthco” unit that would absorb capital-intensive solar farms it develops.
Over the last year, we have been consistently negative on YieldCo valuations and did not see a reason to invest in any of the YieldCos in the market. We were of the opinion that the market was mispricing risk in the long term assets held by these YieldCos.
The invention of the YieldCo is a gamechanger that will enable spectacular growth of solar PV, writes solar pioneer Peter F. Varadi. According to Varadi, the PV YieldCo offers significant advantages over investments in fossil fuel power: no fuel supply is needed, no long-term purchasing contracts for the generated electricity and less costly infrastructure. The solar revolution meets Wall Street.
There may be too many renewable-energy holding companies, according to David Crane, chief executive officer of NRG Yield Inc., one of the first of these ventures to sell shares in an initial public offering.
Every industry needs their “guiding light” and in solar for the last few years that company has been SunEdison. The company could do no wrong and under the watchful eye of Ahmad Chatila, SunEdison has pivoted from being a leading producer of polysilicon to being one of the largest developers and owners of solar projects in the worldwith a pipeline of 8.1GW with 1.9GW currently under construction. It has spun off two separately traded public companies TerraForm and TerraForm Global both of which buy assets from SunEdison when projects are completed and then collect revenues from selling electricity which enables these companies to pay dividends to their shareholders. At the same time, SunEdison has made a significant amount of acquisitions over the last year including spending $2.4bn on First Wind last November and then $2bn for Invenergy and $2.2bn for Vivint Solar, both of which took place last month. And the result has been a 10 fold rise in the SunEdison share price over the last three years to a recent high of $32.13!
BLOOMBERG - TerraForm Global Inc., formed by SunEdison Inc. to acquire renewable-energy assets in emerging markets, raised $675 million in its initial public offering, pricing a reduced number of shares below the original range.
BLOOMBERG - The yieldco market may face “a rush to the exit” from shareholders when interest rates go up. Higher rates may spark a “vicious cycle” that limits the companies ability to acquire more assets, making them appear increasingly overvalued, Michael Liebreich, founder of Bloomberg New Energy Finance, wrote in a report Monday.
MOTLEY FOOL - Yieldcos are the hottest investment in the renewable energy industry these days. On the surface, they're relatively simple companies and investment vehicles. A yieldco buys solar, wind, or other energy-generating assets and generates long-term cash flow from those assets. That cash flow goes to investors in the form of dividends.
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.