Wednesday, March 28, 2012

GE Solar Investments Top $1.4bn in The Last Year

A GE subsidiary has bought a $100m stake in a 127MW US solar project, taking the company's investment in the sector to $1.4bn in the past year.

GE Energy Financial Services' latest investment is in LS Power's $550m Arlington Valley Solar Energy II project in Arizona. Construction on the plant is now expected to start next month with a view to producing enough electricity to power 53,000 homes from 2013.

Overall, GE now boasts investments in solar projects worth $5bn across Australia, Canada, Italy, Portugal, Spain and the United States and is also building what will be the largest US solar panel factory, a 400-MW solar plant in Aurora, Colorado.

"We started last year with the goal of increasing our investments in solar power given improving solar technologies and decreasing costs, and have exceeded our own expectations by doubling our portfolio, investing in attractive projects across the globe," said Alex Urquhart, president and chief executive of GE Energy Financial Services.

Prices of solar panels fell around 47 per cent over 2011, according to Bloomberg New Energy Finance, which, combined with a glut of panels on the world market, is aiding project developers while simultaneously putting many manufacturers' margins under pressure.

US company Abound Solar is the latest to be affected, yesterday announcing it has laid off 280 employees and delayed plans to open a new factory in Indiana, which was part of a project backed by $400m in federal loan guarantees.

Abound said it will cease production of its first-generation solar module and focus efforts on refitting equipment and overhauling its production process in order to launch a next generation high-efficiency module. Mass production of this new module, which Abound expects to have between 12.5 and 12 per cent efficiency, should begin by the end of 2012.

"While this is a difficult move with regards to temporarily reducing our workforce, we know that accelerating the introduction of our next generation module will bring significant benefits to our customers and allow us to create even more jobs in the future," said Craig Witsoe, president and chief executive of Abound Solar.

"Current market conditions are challenging for all US solar manufacturers, but the long-term winners will be manufacturers of the lowest cost per watt, most reliable systems."

One man who is putting his faith in solar is Warren Buffett, whose MidAmerican Energy Holdings is planning a second fund round for its $2.4bn Topaz Solar Farm in California after the first $850m round was over subscribed by $400m.

The bond offering was originally planned to be $700m, but was bumped up in the face of the higher than expected demand. The second tranche is likely to cover the balance of the $1.265bn MidAmerican requires to complete the 550MW project.

MidAmerican bought the Topaz project from First Solar in December and in the same month purchased a 49 per cent stake in NRG Energy's $1.8bn Agua Caliente solar project in Arizona.

The company has also invested or committed around $6bn in wind energy projects and last month created a business unit to expand its oil and gas portfolio to include investments in wind, solar, geothermal, and hydroelectric projects.


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