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

SunEdison Launches Yieldco to Unearth, Leverage Solar Asset Values

Six weeks into the new year and we're already seeing another example of anticipated innovations in renewable energy finance: SunEdison's planned "yieldco" IPO aimed at unlocking the true value of its solar energy assets, and using them to tap into the power of big capital markets.

The proposed initial public offering (IPO) of common stock for a new yieldco vehicle, with terms yet to be determined, was announced hours before the company's quarterly and year-ending financials. Reports over the past couple of months have suggested a SunEdison yieldco could generate a $300 million payday. Later this month (Feb. 24) the company will hold its Capital Markets Day with a more extensive analysis of its business strategies, and surely this will be a big topic of conversation.

Here's why SunEdison and the rest of the industry is so keen to pursue new finance options. Back in its 3Q13 financial results SunEdison calculated its current business model of building and selling solar projects yields about $0.74/Watt -- but those assets' true value could jump as high as $1.97/W if the company can find ways to enumerate and apply various methods: lower the cost of capital, apply various underwriting assumptions, and factor in residual value in power purchase agreements. That's a startling 2.6× increase in potential value creation that SunEdison thinks it can unlock, and creating a yieldco structure to attract interest from the broader investor community is a big part of the answer.

In its 4Q results SunEdison puts more numbers to that value-creation equation: in the fourth quarter it captured an additional $158 million by retaining projects vs. simply selling them off. And by applying most of the 127-MW on its balance sheet with an estimated $257 million in "retained value" to this yieldco, the company says it has sufficient scale to unlock the true value of those solar assets.

In the past year several yieldcos have come to the forefront. Last summer NRG Energy launched NRG Yield with a 1.3-GW portfolio of energy generation assets, though fewer than half of them were renewables (solar and wind); earlier this month NRG Yield proposed to raise another $300 million. Pattern Energy issued its IPO in the fall backed by a number of wind farms. Other recent yieldco examples include Brookfield Renewable Energy Partners and Hannon Armstrong.

More directly from the solar sector, SunPower recently talked about doing a yieldco maybe in late 2015, likely to feature its 135-MW Quinto project and possibly its 120-MW Henrietta project. Others eyeing the yieldco model reportedly include Canadian Solar, Jinko Solar, and First Solar.

"This trend is transformative for the solar industry" because of how it can unlock so much more value and thus returns, explained Patrick Jobin, Clean Technology Equity Research analyst with Credit Suisse. (Disclosure: SunEdison is one of his top picks specifically for that reason.) "We're probably in the first or second inning of the public capital markets appreciating what this does for the industry."

Lead image: Happy successful business man raised arms with sky, via Shutterstock

Untitled Document

Get All the Renewable Energy World News Delivered to Your Inbox

Subscribe to Renewable Energy World or email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Solar water heating

California Regulators Propose Expansion of Eligibility Requirements for Solar Water Heating Program

Jennifer Delony The California Public Utilities Commission has proposed expanding the eligibility requirements for customers seeking ...

Florida Supreme Court Takes Up Solar Question

Wayne Barber Because Florida remains one of only four states where current laws expressly deny citizens and businesses the freedom...
solar net metering

Lithuanian Net Metering Hits Snag from Outset

Linas Jegelevicius The much anticipated net metering in Lithuania has hit a major snag from the very start – the introduced network oper...
Solar energy

Colorado PUC Orders No Changes to Solar Net Metering

Vince Font In what is being lauded as a “fair outcome” for consumers, utilities and the solar industry alike, the Colorado Publi...


US Solar Hosts Sierra Club Solar Meeting

This past Monday, US Solar welcomed a new group to its solar training classroom – The S...

US Solar Invited to Speak at Intersolar North America

Intersolar, the largest solar conference and expo in North America is right around the ...

US Solar - Green Planet Festival Highlights Solar Energy and Solar Training This Weekend

US Solar Institute (USSI) is excited to announce that they are the educational sponsor ...

Yaskawa – Solectria Solar Provides Inverters for One of the Largest Professional Sport Stadium PV Systems in North America

Yaskawa - Solectria Solar, a leading U.S. PV inverter manufacturer, announced today tha...


Solar Decathlon 2015 Opens to the Public in California

Today, Oct. 8, the biennial Solar Decathlon opened up to the public at Orange County Great Park in Irvine, ...

ENER-G CHP technology selected for major London housing scheme

ENER-G has been selected to supply combined heat and power (CHP) technology for phase two of the Leopold Estate housi...


Necessity is the mother of innovation. Our planet is going through major changes in climate. This of course will affe...

Georgia Legislature Approves PPA’s, Florida Hoping to Follow

Ah, the sunny south, the land of peaches, oranges and solar potential. I’m talking about Georgia and Florida he...


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...

Solar Frontier Offsite Office at Solar Power International (2 mins....

Solar Frontier will be hosting an offsite meeting room offering our gues...

PV-Diesel Hybrid Systems to Reduce Diesel Demand

Substantial fuel cost saving potential has made PV technology the centre...


Sell Through Hypothesis

You first learned to hypothesize, or make educated guesses, in grade sch...

Vacancy? No Problem!

Have you ever tried to sell an efficiency product or service to a prospe...

Going The Extra Mile

Selling efficiency takes perseverance, creativity, and a willingness to ...


Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now