(Adds First Solar CEO comment, background on yieldcos, share
April 5 U.S. solar company First Solar Inc
on Wednesday said it was looking to sell its stake in a
publicly traded company it formed with rival SunPower Corp
less than two years ago, at the height of investor
euphoria over so-called "yieldcos."
Separately, SunPower said it was exploring strategic
alternatives for the venture, 8point3 Energy Partners.
Shares of the company slid 12 percent in extended trade on
Yieldcos are publicly traded entities that house solar and
wind projects with long-term contracts with utilities. The
vehicles collect the stable cash flows from utility contracts
and pay them out as dividends.
In its statement, First Solar said the move would allow it
to allocate more capital to the production of its
next-generation Series 6 panels, which Chief Executive Mark
Widmar said "has the potential to be a transformational
A global glut of panels has pushed prices down substantially
over the last year, cutting profit margins for manufacturers
like SunPower and First Solar and sometimes driving prices on
power plant contracts down to uneconomic levels. First Solar,
which is based in Tempe, Arizona, announced late last year that
it would bring forward production of Series 6 by a year in a bid
to improve profitability.
Yieldcos became popular among investors earlier this decade
because they were viewed as a less volatile means of investing
in renewable energy. But the bankruptcy of solar industry
bellwether SunEdison, which formed two yieldcos before imploding
last year, soured investor interest on the business model.
8point3, which houses projects developed by both SunPower
and First Solar, went public at $21 a share in June of 2015. Its
stock closed at $13.21 Wednesday on the Nasdaq, and dropped to
$11.65 in after-hours trade.
In its statement, SunPower said it would consider a
potential replacement partner for First Solar, among other
options. The partnership "still offers significant, long-term
strategic value," the San Jose-based company said.
SunPower is majority owned by France's Total SA.
(Reporting by Komal Khettry in Bengaluru; Editing by Anil
D'Silva and Bill Rigby)