Tesla Closes Acquisition Of SolarCity
Elon Musk’s “master plan” is coming to fruition, as Tesla’s acquisition of SolarCity officially closed at the end of November.
According to a Tesla blog post, the electric vehicle (EV) and battery maker’s shareholders “overwhelmingly” approved the all-stock transaction: “Excluding the votes of Elon and other affiliated shareholders, more than 85 percent of shares voted were cast in favor of the acquisition.” The Tesla vote came shortly after SolarCity’s shareholders also signed off on the deal.
When the planned acquisition was first revealed in June, Musk, who serves as CEO of Tesla and chairman of SolarCity, called the proposal a “no brainer.” By allowing customers to buy EVs, energy storage products and solar from one company, Tesla claimed the acquisition would allow it to become “the world’s only vertically integrated energy company offering end-to-end clean energy products to our customers.”
However, many investors and industry stakeholders were initially skeptical of the plan to integrate a car and battery manufacturer with a solar provider, as well as raised concerns about potential conflicts of interest between two companies that had overlapping shareholders and a family connection (Musk is also the cousin of SolarCity co-founders and executives Lyndon Rive and Peter Rive).
Over the next few months, Musk worked to convince investors and the public that the acquisition made sense, both financially and logically. In July, he pointed out in a blog that his “master plan” for Tesla has always included a goal to provide solar. Musk also said integrating rooftop solar with energy storage was a key part of his updated plan.
“One ordering experience, one installation, one service contact, one phone app,” he wrote. “We can’t do this well if Tesla and SolarCity are different companies, which is why we need to combine and break down the barriers inherent to being separate companies. That they are separate at all, despite similar origins and pursuit of the same overarching goal of sustainable energy, is largely an accident of history.”
In October, Musk spearheaded a joint Tesla/SolarCity event at Universal Studios in Los Angeles, during which he unveiled new solar roof tiles and presented the new generation of Powerwall and Powerpack energy storage products. The event garnered widespread media coverage, and videos of the flashy solar roofs were reposted all over the Internet. Not long before the shareholders voted, Tesla also laid out a long explanation on its website about the synergies between the two companies. In the end, the hard work paid off, and the once-controversial transaction was approved.
Now, the merged companies are showing off what a merger of solar power and energy storage can do – power an entire island.
SolarCity, a wholly owned subsidiary of Tesla, recently highlighted a microgrid project completed on Ta’u, an island in the U.S. territory of American Samoa, that can supply almost 100% of the island’s power needs using solar power.
According to a SolarCity blog, the Tesla/SolarCity microgrid combines over 5,300 solar panels totaling 1.4 MW with 60 Tesla Powerpacks totaling 6 MWh of energy storage. Although the blog does not specify when the project was completed, it says the microgrid took “just one year from start to finish.” The project received federal funding and is operated by the American Samoa Power Authority.
Like many other remote islands, Ta’u has relied mostly on diesel generators for power, but as the blog points out, diesel is an expensive and dirty fossil fuel, and maintaining reliable power using such generators can be a challenge, especially since diesel needs to be shipped to the island and might need to be rationed. By providing solar day and night, the on-island microgrid is expected to offset the need for about 110,000 gallons of diesel fuel annually, and it can power the island for three whole days without sun. The blog calls the microgrid “life changing for residents of Ta’u” and cites Keith Ahsoon, an island native who has a family-owned food store on Ta’u.
“It’s always sunny out here, and harvesting that energy from the sun will make me sleep a lot more comfortably at night, just knowing I’ll be able to serve my customers,” says Ahsoon.
The blog also suggests that the official combination of Tesla and SolarCity could lead to similar projects: “Ta’u is not a postcard from the future; it’s a snapshot of what is possible right now.” – Joseph Bebon
U.S. Solar Market Had Its Biggest Quarter Ever
In the third quarter of 2016 (Q3’16), the U.S. solar market shattered all previous quarterly solar photovoltaic (PV) installation records.
According to the latest U.S. Solar Market Insight report from GTM Research and the Solar Energy Industries Association (SEIA), 4,143 MW of solar PV were installed in the U.S. during Q3’16 – a 99% increase over Q2’16 and a 191% rise over Q3’15. On average, one new megawatt of PV capacity came online every 32 minutes in Q3’16.
“Coming off our largest quarter ever and with an extremely impressive pipeline ahead, it’s safe to say the state of the solar industry here in America is strong,” says Tom Kimbis, SEIA’s interim president.
The report points to an “unprecedented rate of project completion” in the utility-scale segment as a key growth driver. In fact, the utility-scale segment represented 77% of U.S. solar PV installed in the third quarter. Furthermore, GTM Research anticipates that a massive 4.8 GW of utility PV projects will come online in Q4’16 – that’s more than what was installed across the entire utility PV segment in all of 2015.
“Driven by a large pipeline of utility PV projects initially procured under the assumption of a 2016 federal [investment tax credit] expiration, the third quarter of 2016 represents the first phase of this massive wave of project completion – a trend that will continue well into the first half of 2017,” says Cory Honeyman, associate director of U.S. solar at GTM Research.
According to the report, the non-residential segment posted its second-largest quarter ever. With 375 MW installed, the segment grew 15% over Q2’16 and 37% annually. The report says part of this growth is attributed to a community solar pipeline that is finally beginning to materialize, and community solar accounted for a record 20% of the non-residential PV market in Q3’16.
Q3’16 marks the sixth consecutive quarter in which more than half-a-gigawatt of residential PV was installed; however, the report notes this segment is experiencing a slowdown from its peak growth quarters. The residential PV segment grew just 2% year-over-year and actually fell 10% from the previous quarter’s total. The report cites changes in the sales cycles in mature state markets, such as California, and challenges posed by rate design reform, such as the elimination of retail net metering in Nevada, as reasons for the shift.
A mere three years ago, the U.S. eclipsed 10 cumulative GW of PV installed. GTM Research expects the U.S. to have installed 14.1 GW in 2016 alone – up 88% over 2015’s total.
NRG Energy Picks Up Assets From SunEdison
NRG Energy has wrapped up the previously announced acquisition of a large renewable project portfolio in the U.S. from bankrupt SunEdison.
In September, NRG revealed that it had received court approval for the agreement with SunEdison, which filed for Chapter 11 bankruptcy earlier in 2015 and has been selling off many of its assets during its restructuring process. The portfolio that NRG has acquired consists of over 1.5 GW of utility-scale solar PV and wind projects that are either completed or under development across the U.S.
According to NRG, the company has acquired the following: SunEdison’s partnership interest in a 530 MW, fully constructed, fully contracted portfolio of seven solar projects in Utah (a portion of NRG’s interest will be available for drop down to its yieldco, NRG Yield); ownership of a 154 MW, fully contracted, partially constructed solar project in Texas; and ownership of 1.1 GW of solar and wind assets in various stages of development at locations across the U.S., including 111 MW of construction-ready assets in Hawaii. NRG says the agreement with SunEdison provides for total consideration of up to $183 million.
In addition, the company says it has closed a separate agreement with SunEdison to acquire a 29 MW portfolio of distributed generation and community solar projects under development across 26 sites in California, Florida, Massachusetts and Connecticut.
NRG says the acquisitions will increase the company’s renewable energy portfolio, provide more assets to drop down to its yieldco, and allow the company to enter new markets.
Bill Gates Unveils $1B Clean Energy Investment Fund
Members of the Breakthrough Energy Coalition (BEC), a group led by tech entrepreneur and philanthropist Bill Gates, have established a new investment fund. Called Breakthrough Energy Ventures (BEV), the fund will invest more than $1 billion to finance emerging energy breakthroughs to deliver affordable and reliable energy, with the goal of reducing global greenhouse-gas emissions to near-zero.
The BEC is a group of entrepreneurs, business leaders and institutional investors who, in November 2015 in Paris, announced their commitment to help bring promising new zero-emissions energy technologies to market. The BEC’s original commitment was made in parallel to the launch of Mission Innovation, an initiative by countries to double clean energy research and development.
“It is extremely exciting for us to launch this fund as the next step in the commitment made by the Breakthrough Energy Coalition,” says BEV Chairman Bill Gates in a press release. “I am honored to work along with these investors to build on the powerful foundation of public investment in basic research. Our goal is to build companies that will help deliver the next generation of reliable, affordable and emissions-free energy to the world.”
According to the coalition, BEV will collaborate with other investors, governments, research institutions and corporate partners, bringing to the table an investor–led fund with internal scientific expertise, a long-term horizon, and a tolerance and understanding of the investment risks required to transform energy markets. The coalition notes BEV is not confined to any segment of the investment pipeline – it will build companies, engage in traditional venture investment and have the ability to invest for growth as innovations mature. Consisting of over 20 investors located around the world, BEV will have a 20-year life span.
Enphase Sheds O&M Subsidiary Next Phase Solar
Enphase Energy Inc., a California-based technology provider specializing in solar micro-inverters, has offloaded essentially all of the assets of its Next Phase Solar subsidiary. Enphase purchased Next Phase Solar, an operations and maintenance (O&M) provider, in 2015.
At the end of 2016, though, MaxGen Energy Services acquired the commercial services unit of Next Phase Solar, and SunSystem Technology LLC (SST) acquired Next Phase’s residential field service division. Terms of both deals were not disclosed. However, Christian Zdebel, an Enphase Energy spokesperson, tells Solar Industry, “With the exception of some cleanup items, the company does not have any more assets from Next Phase.”
According to Zdebel, Enphase sold the rights to the Next Phase Solar brand with the commercial assets to MaxGen, and SST acquired the remaining residential field service assets. The sale of the Next Phase Solar subsidiary follows Enphase Energy’s announcement in September that it was streamlining its operations and focusing on core competencies in an effort to remain competitive amid market challenges.
“We do, however, retain many of the Enphase Energy Services assets that Enphase developed prior to the Next Phase acquisition, including key personnel, systems, data analytics and customer relationships,” explains Zdebel. “Importantly, we have a number of strong contracts with installers that we will continue to service and grow through Enphase Energy Services. Under these contracts, Enphase typically handles the customer service, monitoring and maintenance for a portfolio of Enphase systems.”
He continues, “The change is that field service will typically be performed by strategic partners like SST, rather than by Enphase employees.”
MaxGen CEO Mark McLanahan says in a press release that the company is “very excited to welcome Next Phase Solar to our rapidly expanding company.” McLanahan notes, “This acquisition will add over 1,000 sites to our existing portfolio of 3,000 sites that we already manage nationally.”
In a separate announcement, SST says that its acquisition of the field services division of Next Phase Solar will significantly expand SST’s U.S. residential solar O&M business. The two companies have also entered into a strategic partnership through which SST will serve as Enphase’s primary residential O&M service provider.
“We are very excited about this transaction with Enphase,” says Derek Chase, CEO of SST, in a press release. “This acquisition and partnership will enable both of our companies to drive down costs and maximize efficiencies that can only be realized through greater economies of scale.”
“Transitioning the residential field services that were part of our Next Phase business to SST leverages their core strengths and experiences to best service our residential customers and enhances our ability to focus on our core business priorities: launching the next generation of our industry-leading micro-inverters, the Enphase storage system and our AC modules,” says Paul Nahi, president and CEO of Enphase, in the release.