Discussing Yieldcos A Popular New Model for the Selling and Buying of Solar Assets

There has been an increase in the sale of large solar projects that are in development or have already been built. While developers have a variety of funding options, yieldcos are gaining momentum in the solar energy sector as a new financing model. A yieldco is a corporate subsidiary created by developers and energy companies as a low-cost alternative to fund the development and long-term maintenance of solar projects. They are publicly listed and the profit from the sale of shares to investors is used to fund construction and operation costs.

Louis Berger, co-founder and managing partner of Washington Square Capital Management, a New York investment advisory firm, says the market has an appetite for yieldcos.

“A lot of them have come into the market and they’ve done pretty well. There is certainly an appetite there from issuers,” Berger said.

In February, SunPower and First Solar announced that they are involved in advanced negotiations to form a yieldco. Barry H. Epstein, a partner with the San Francisco law firm Allen Matkins, representing SunPower says, “SunPower and First Solar are some of the biggest players in the industry.”

Barry-Epstein-3In this Q&A, Epstein discusses development law affecting solar project transactions.

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