The new year has brought optimism among U.S. solar companies, from manufacturers to project developers, with some of them touting solid 2013 financial performance and promise to do better in 2014.
Enphase Energy Enphase Energy, which makes power electronics for solar panels, generated a record revenue of $67.1 million for the fourth quarter and a non-GAAP operating profit for the first time in the company’s history. Enphase , which announced its financial results yesterday, was founded in 2006 and broke a dry spell for solar IPOs when it went public in 2012.
SunPower SunPower’s CEO, Tom Werner, called 2013 a “break out year” when he discussed the company’s earnings with analysts last week and promised to deliver better earnings this year. SunPower posted profits in 2013 after suffering significant losses in 2012.
SunEdison, a project developer and maker of silicon and wafers, is working on two initiatives this year that it hopes will shield it from certain market forces and deliver long-term profits.
The company, which posted $586.7 million in losses on $2 billion in revenues for 2013, plans to keep more of the completed solar projects it’s built and create a public company that will own those projects. It also plans to spin off its silicon business through an IPO.
Next week, First Solar First Solar and SolarCity SolarCity will announce their fourth-quarter and 2013 financial results.
SunEdison changed its name from MEMC Electronic Materials last year to reflect the company’s focus on the solar business. MEMC was a long-time silicon and wafer producer serving the chip industry, and bought SunEdison the project developer in 2009. Lukewarm demand for silicon and wafers led the company to shutter its silicon factory in Italy and consolidate its silicon crystal operations.
“We feel very good about 2014,” said Brian Wuebbels, SunEdison’s chief financial officer, during a conference call with the analysts this morning.
The strategy of keeping some of the completed solar power projects instead of selling them will be an interesting one to watch. It’s a different approach than what many of its competitors, such as First Solar and SunPower, have taken: they prefer to sell the projects they have developed and built.
First Solar and SunPower have more mega projects of a couple of hundred megawatts each that serve utilities that what SunEdison has in its project portfolio, however. SunEdison executives noted that they would sell mega projects, too, in order to finance new ones. But their focus has been on developing projects for non-utility businesses.
Solar companies like SunEdison expect their projects to attract more investor interest and create more ways to make money as the solar industry matures and demonstrates that it could deliver good long-term returns. Wuebbels contended that keeping certain projects could create 2.5 times more values than selling them. Some of the values come from money that isn’t spent on negotiations and paying bankers and others during each project sale, he said.
SolarCity completed the industry’s first securitization of rooftop solar assets last year. The company’s effort was seen as an indicator of the investor appetite for solar. SolarCity took the plunge because of its need to raise capital to finance its growth, and historically it raised money from banks and corporate investors such as Google and Pacific Gas and Electric.