The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Mega-Solar Matchmaking in California

Flexing its billion-dollar muscles once again in the renewable energy space, MidAmerican Energy Holdings Company (famously backed by Warren Buffett's Berkshire Hathaway Inc.) is buying two co-located solar projects in California from SunPower, billed as the world's largest permitted solar PV power development. The deal for Antelope Valley Solar Projects (AVSP), totaling approximately 579 megawatts (AC) combined generation capacity, is for an unspecified amount between $2-$2.5 billion.

To SunPower president Howard Wenger, this deal represents no less than "a historic milestone for the energy industry." Cost-competitive with natural gas peaker plants, the AVSP projects define "a perfect example of how scale is driving cost reduction."

The Facts About AVSP

SunPower has been developing the two co-located AVSP projects for four years, on 3230 acres of private property in Kern and Los Angeles Counties near Rosamond, CA: the 309-MW (AC) "AVSP 1" owned by Solar Star California XIX; and the 270 MW (AC) "AVSP 2" owned by Solar Star California XX, which according to SEC filings includes the option to develop another 49-MW facility, dubbed "AVSP 3." (There is no relation to the similarly named 230-MW Antelope Valley Solar Ranch One project, developed by First Solar and sold in 2011 to Exelon, which is planned to be fully operational by late 2013.) AVSP will incorporate SunPower's own Oasis power plant modular solar technology, high-efficiency solar panels, and trackers to boost energy capture. The company will be the engineering, procurement, and construction (EPC) contractor, and operate and manage the facility under a 20-year services agreement.

AVSP has secured final conditional use permits and has completed full environmental review pursuant to the California Environmental Quality Act. Both projects are under two 20-year power purchase contracts with Southern California Edison (SCE); grid connection will be through the Whirlwind Substation being constructed as part of SCE's Tehachapi Renewable Transmission Project. Construction of the plants, which will create 650 jobs, is slated to begin in 1Q13 and completed by the end of 2015.

SunPower: Balancing the Equation

From the beginning, SunPower’s plan for AVSP has been to develop the projects, get them financed (including finding an equity owner), and then building and operating the projects with its own technology. With AVSP’s size and scope, the company specifically was seeking a partner "with a strong balance sheet, who understood the economics and importance of renewable energy," according to SunPower president Howard Wenger. The bidding process was well underway by mid-2011, with "very strong" initial interest from prospective financiers — “We were very pleased with the level of interest and quality of companies and offers,” he said.

Projects of this size and scope are getting harder and harder to come by, and  developers such as SunPower, First Solar, and SunEdison are finding it tougher to refill their pipelines, especially ones with the same favorable economics. "They're selling projects that were priced a couple of years ago when modules were expensive," points out Shawn Kravetz, president of Esplanade Capital LLC. And now they're being delivered in an environment where module costs are much lower and likely will continue to go down for the next year or two. He thinks 2013 will be "an unusually robust year" for those big solar project developers that secured projects over the past several years, but as they try to replenish their pipelines, "high price and low costs — that's not happening anymore."

SunPower in particular needs to keep feeding that downstream business, asserts Kravetz, due to its relatively high-cost manufacturing operation vs. a host of ruthlessly low-cost competitors (think Tier-1 Chinese firms including Yingli, Suntech, Trina, and JA Solar). As more of these large profitable projects are harvested, that upstream exposure will weigh even more heavily, especially in a solar market that promises to remain challenging for the next year. Stifling cost pressures is rough on the upstream, but makes the financial equation more attractive on the project development side of the equation.

Perhaps most importantly for SunPower: this deal represents a vote of confidence from an up-and-coming energy player with the desire and ability to invest substantially in renewable project development. “MidAmerican Solar’s decision to invest in these projects underscores the bankability and long-term strength of SunPower’s business,” Wenger said. (Investors agreed, spiking the company’s stock nearly 50% with 24 hours of the deal, though they had pulled back about 12% a few days later.) And as Kravetz points out, this isn’t exactly the inimitable Warren Buffett stamping his approval of solar stocks, but “it’s a company owned by him, saying these are energy projects that are a good investment.”

MidAmerican: Sealing the Deal

In Jan. 2012, MidAmerican Energy formed a new unit, MidAmerican Renewables LLC, to manage and grow its renewable energy interests — and the company has professed, and proved, its appetite for renewable energy investments from Day 1. After one year, MidAmerican Renewables' total portfolio of owned assets, including solar, wind, geothermal, and hydro, now exceeds 1.83 GW, including the AVSP projects (see sidebar). That's more than twice the size of the parent group's 872 MW in natural gas energy generation projects.

These AVSP projects satisfied MidAmerican's criteria checklist for any renewable energy generation investment: "All the critical things we look for were there," explained Paul Caudill, president of MidAmerican Solar. It's an area with good solar insolation and a good weather record. There is available land and land that can be permitted. Transmission access is suitable for a grid-type plant, with both existing infrastructure and commitment for network upgrades, Caudill explained; the Whirlwind Substation is "well underway so we know where they are at," and the Tehachapi interconnection "also has very good progress." (MidAmerican was already familiar with the local transmission infrastructure; its recently acquired "Pinion Pines" wind projects, formerly called Alta Wind, are also located in Kern County.) Additionally, there are deals in place with California ISO and a buyer in Southern California Edison.

One other aspect of AVSP's profile was attractive: it used SunPower's technology, which is different than the First Solar thin-film (cadmium telluride) technology used at MidAmerican's Topaz and Agua Caliente projects. "We saw diversification as a strong point," Caudill said. That "diversification" could put MidAmerican in an excellent position to evaluate performance of two competing solar PV technologies on a grid-scale playing field: SunPower's higher-efficiency modules with trackers, vs. First Solar's thin-film panels that have lower conversion efficiencies but perform better in high-temperature environments. MidAmerican, however, rejects that idea, saying they see "tremendous benefits" in having both technologies at its disposal, and it follows the parent company's pattern of using different suppliers — for example, two types of wind turbines (Siemens and GE) incorporated into its wind projects in Iowa.

Beyond "Megaprojects," Going Distributed?

To feed its ravenous appetite for renewable energy projects, MidAmerican keenly tracks what has been "a tremendous amount of development in solar and wind in the past few years," particularly outside of California, Caudill says. "We're very in tune with the industry and where the good markets are." MidAmerican currently has "a fairly sizable pipeline of projects" that it is evaluating; "we're comfortable that there are good solid assets out there."

But those attractive multihundred-MW megaprojects like AVSP, with proven technology and PPA(s) in hand, are increasingly hard to come by -- so MidAmerican is looking to add other types of projects that make sense. "We don't sit down and say, 'we have to invest in a plant that's 100 MW or greater or we're not interested,'" Caudill said. MidAmerican's sweetspot for future renewable project development, Caudill said, "could be substantially smaller than we see today." He expects over the next few years the company will pursue more projects in the 40-MW to 60-MW range, which have their own attractive features: they require less land use, transmission requirements aren't as stringent, and of course costs are lower. And the convergence of costs coming down, energy prices going up, and the economy picking up momentum, he said, opens up emerging markets in areas not traditionally seen as "solar states," in places such as Tennessee and Georgia.

And that likely includes forays into distributed generation deals, Caudill pointed out. He envisions growing involvement in "behind-the-meter projects," working with local utilities and businesses to offset carbon footprints and compete at peak power needs. "The distributed generation market, once it gets fleshed out, could be very strong," he said.

The bottom line for MidAmerican is identifying places where rates are high at peak and that are squeezed on the generation side, Caudill says. "Those drive the market. It's hard to say where we end up next — but I feel strongly that there are opportunities out there."

[Editor's note: Want to learn more about solar match-making, which companies are getting into solar and which are exiting? Come to Solar Power-Gen next month and check out our plenary session: Who is Buying Whom and Why? More information about the show is here.]

Untitled Document

Get All the Renewable Energy World News Delivered to Your Inbox - FREE!

Subscribe to Renewable Energy World Magazine and our award-winning e-Newsletter to stay up to date on current news and industry trends.

 Subscribe Now



A Case Study in Energy-Transition Momentum

Tim King South Australia is clearly at the forefront of the global energy transition as it establishes a fast-moving model oth...

Listen Up: Can I Get Solar if my Roof is Shaded?

The Energy Show on Renewable Energy World Rooftop solar panels only work when they are in direct sunlight. So if you have a partially shaded roof, the output o...

US Senate Democrats Unveil Energy Bill That Restores PTC and Extends ITC

Brian Eckhouse, Bloomberg Senate Democrats unveiled a bill that would provide more tax credits for renewable energy while killing some tax ince...

US, China Solar PV Players Team Up, Invest $100M in Chile, Uruguay and Japan

Andrew Burger Private equity infrastructure specialist Hudson Clean Energy Partners and Hong Kong-based independent power producer ...


Power Engineering and Renewable Energy World Magazines Name Projects of the Year Awards Finalists

Tulsa, Okla. and Nashua, N.H., Oct. 5, 2015 -- The editors of Power Engineering and Ren...

Sun Xtender® Launches New Website at

The newly designed website for Sun Xtender solar batteries is now live on the World Wid...

Array Technologies Finalizes Shipments to E.ON’s Maricopa West Solar Project

Array Technologies, Inc. (ATI) has completed DuraTrack® HZ shipments to the 20 MW (ac) ...

Canadian Solar Closes Purchase of Ontario Assets from KKR

Canadian Solar Purchased 3 Solar Power Plants Totaling 59.8 MW AC from KKR


energy efficiency

Beyond the Trend: Maximizing the Impact of Your Energy Efficiency Solution

A revolution is happening in the energy sector. From the new regulations pushed out earlier this summer by the EPA’s ...

Northeast States Create Cap-and-Trade Program for Greenhouse Gas Emissions

Northeast states have worked together for several decades to address air quality issues and, more recently, climate c...

Why the Solar PV Industry Should Love Geothermal Heat Pumps Pt 2

It’s a marriage made in heaven: Solar PV and Geothermal Heat Pumps Part 2 of a 6-Part Series Prevailing Heati...

The Whirlwind Known As Tradeshow Season 2015

Wow. What a tradeshow season 2015 is turning out to be! Hot on the heels of Intersolar and SPI, next week we’re...


Jim is Contributing Editor for, covering the solar and wind beats. He previously was associate editor for Solid State Technology and Photovoltaics World, and has covered semiconductor manufacturing and related industries, ...


Volume 18, Issue 4


To register for our free
e-Newsletters, subscribe today:


Tweet the Editors! @jennrunyon



Successfully Integrating Solar: A Proactive Approach

•      What does the increasing solar penetrati...

Canadian Solar Inverters Webinar

Canadian Solar is proud to be hosting two free webinars in October! The ...

JuiceBox Energy Certified Installer Class

JuiceBox Energy is rapidly building out its national certified installer...


SPI Brings Out The Best In Solar

Phew…...those cross-country flights sure take a lot out of a guy....

Connecting The Dots

One of the most important attributes of a true sales professional is the...

7 Pitfalls Of Simple Payback Period

There are many pitfalls of using Simple Payback Period (SPP) as a measur...


Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now