Solar Industry Mergers and Acquisitions (M&A) List – Rising as Industry Consolidates

Solar Industry Mergers and Acquisitions (M&A) have picked up pace in recent times with a number of companies in distress with supply exceeding demand as Italy suddenly changed its solar subsidy policy in April 2011.With high inventory levels and prices crashing only the biggest and best solar panel manufacturers are managing to thrive.Note the Solar PV Industry has not seen too much M&A unlike the Solar Thermal Industry which has always been a hot area for M&A activity as giant industrial groups like Siemens,Areva,Alstom and GE have bought startups to improve their technology offerings.With the Solar PV industry having crossed more than $50 billion mark in 2010,more and more MNC conglomerates have now starting buying solar companies at cheap valuations.Here is a list of the recent buyouts,stake buys and mergers in the Solar PV Industry that have taken place recently.

1. Total the French Oil and Gas Giant has agreed to acquire 60% of the 2nd largest US Solar Energy Company Sunpower of $1.38 billion besides providing it another billion dollars in easy credit for its system business.Sunpower is being acquired at a cheap price considering its world beating solar cell technology and its massive systems business which has gigawatts of solar projects under development.Note Sunpower makes the highest efficiency solar panels on a commercial scale and recently tied up with AUO.It is the 2nd biggest solar plant installer in the US and has a massive presence in the commercial and government sector.Total said it looked at over 200 companies before buying Sunpower.
2. Hanwha Buys Chinese Solar Panel Producer Solarfun – South Korean Conglomerate Hanwha subsidiary Hanwha Chemicals bought a 49.99% stake of Solarfun Solarfun is the 4th largest Chinese company which has been executing well on a vertical integration strategy.The company has 900 MW of module capacity with ~400-500 MW of wafer and cell capacity.
3. Sharp Acquires US Solar Developer Recurrent Energy – Sharp which was the largest Solar Producer by Revenues in 2009 has seen its position go down in Q210 as the Chinese and First Solar have overtaken it in shipments.The company has entered the Independent Power Producer (IPP) segment by tying up with Italian Utility Enel.The Company is also building a thin film solar plant in Italy in partnership with Enel.It is now further enhancing its position in the IPP segment by acquiring Recurrent Energy for $305 million.It acquires  330 MW of projects with another 1700 MW in a feasibility phase.
4. TSMC buys equity stakes in Taiwan Cell Producer Motech and US CIGs startup Stion – Taiwan based semiconductor company TSMC ( Taiwan Semiconductor Manufacturing Corporation) is getting serious about investing in Solar Energy.Other Taiwanese Heavyweights like AUO,CMO and UMC are also in the process of ramping up their solar production plans.TSMC has been a late entrant into the solar energy market but is making much smarter moves than its Taiwanese peers.It bought a 20% stake in Motech (Taiwan’s oldest and largest solar cell company) for $192 million.Its $50 million stake buy in Khosla backed unlisted CIGS startup Stion is another smart investment.
5. Terra Firma Buys Rete Rinnovabile – Terra Firma,the multi billion pound Private Equity firm has continued its Renewable Energy Asset Buying Spree spending a monstrous 641 millino Euros to buy Rete Rinnovabile a solar plant owner and operator in Italy.The acquired company is a susdiary of Italian market grid operator Terna and owns around 150 MW solar capacity in Italy which witnessed a massive solar boom in 2010.The acquisition values 1 MW at 4.5 Euros which would be considered not an expensive price given the large returns availabe for Italian solar power assets which gets a generous government mandated feed in tariff.
6. GE buys a stake in one of the most promising solar startups eSolar – General Electric bought a minority stake in California-based  to develop power plants that combine solar thermal energy and natural gas.The investment gives G.E. an exclusive license to combine ESolar’s tower-based solar power tower technology into its new 510 MW natural gaspower plant, the FlexEfficiency 50.
7. Siemens buys 16% stake in HCPV Semprius – Semprius  had a partnership to develop  a “plug-and-play” CPV system .Semprius  has a micro-transfer printing technology, which rapidly stamps semiconducting material onto a substrate, such as glass or plastic. Semprius modules use gallium arsenide multi-junction solar cells instead of the mainstream silicon based cells.
8. Real Goods Solar Merges with Alteris Renewables – Not a big deal as the merger was between 2 small solar developers in the USA but shows the trend towards larger scale even in the fragmented soolar installer part of the solar food chain.

Note the other big deals in the past was Sunpower acquiring solar systems developer Powerlight and Italian developer Sunray, Siemens buying Solel and MEMC buying SunEdison.There have also been numerous other buyouts by First Solar of the solar project development businesses of Turner,Ausra and others.

M&A in Solar Thermal Industry and Reasons

The Solar Thermal Space or CSP (Concentrated Solar Power) is seeing increasing consolidation with numerous acquisitions and partnerships . There are 3 main reasons for this trend

1. Solar Thermal projects typically are built on a scale of Hundreds of Megawatts requiring large amounts of capital which is typically beyond a startup
2. These CSP Projects also require engineering and construction capabilities which are again beyond startup capabilities
3. Large Power Equipment and EPC companies like Bechtel,Areva etc possess the capabilities but lack innovative Technology in this space

The above 3 factors make the the sector fertile for partnerships and acquisitions some of which are  listed below

1. Seimens bolstering its capabilities by acquiring CSP pioneer Solel Solar Systems for $418 million
2. Bechtel partnering with Brightsource Energy in building a massive 440 MW plant in California
3. Areva buying up startup Ausra which was facing funding difficulties
4. Alstom taking a $55 million stake in series C funding of Brightsource Energy