Details on Crius Solar’s three-state licensing, acquisition of SunEdison assets

Crius Solar LLC is ready to expand its base of operations, starting with securing three new licenses: the Commonwealth of Massachusetts, Connecticut and New Jersey. The licenses affirm Crius Solar’s commitment to the safe and quality installation of solar PV systems in collaboration with local licensed electricians, and other non-electrical building professionals as needed.

“Recent enhancements to our solar capabilities will help the Crius Solar team expertly manage a customer from interest through to installation, delivering a superior, worry-free solar experience that helps the environment and our customers’ energy budgets,” says Christian McArthur, Executive Vice President.

Big acquisitions

Crius Energy

Crius Solar’s parent company, Crius Energy, recently announced two transactions designed to expand and rapidly transform its solar energy business. The company acquired a proprietary residential solar technology platform, customer lead databases, marketing materials and human capital from SunEdison in September 2016 and is set to acquire certain residential solar installation assets from Verengo Solar.

Once complete, the company’s solar business will transition from a solar product reseller to a fully integrated solar company with the technology, team, expertise and a track record of more than 20,000 residential solar installations dating back to 2008. Crius Solar plans to leverage these enhancements, as well as innovative bundled products from Crius Energy, to provide additional customer value and claim marketshare in the fast-growing solar energy industry.

Massachusetts

As of the end of 2015, Massachusetts had 1,243 MW of installed solar electric capacity, ranking it sixth nationally and reflecting 10% growth in solar capacity over 2014. A key driver of this growth is the Massachusetts Residential Renewable Energy Income Tax Credit. Under this credit, the owner of a solar energy system can deduct 15% of the cost of the system (up to $1,000) from their state income taxes. Massachusetts residents also benefit from some of the nation’s best solar policies including net metering, where solar homeowners receive bill credits for their solar electricity at the same retail rate that they pay for their electricity in the Commonwealth.

In addition to solar energy system installations, Crius Solar will offer customers in Massachusetts an exclusive, low rate on solar through its sister brand Public Power. Designed to deliver value to Crius Solar customers before panels are even on the roof, the innovative ConnectNow electricity product bridges homeowners to the time when they will be generating their own clean, affordable energy.

RELATED: Study: Massachusetts should install a ton of advanced energy storage by 2020 

Connecticut

Connecticut is one of the fastest growing solar markets, with installed solar capacity expanding by 64 percent over the last year. After the Connecticut Property Assessed Clean Energy (C-PACE) program fueled accelerated solar adoption among municipalities and commercial property owners, the state’s Residential Solar Investment Program (RSIP) is helping to “green” Connecticut homes.

RSIP provides rebates that lower initial out-of-pocket costs to Connecticut homeowners who wish to install a solar energy system. Connecticut residents also benefit from other incentives that help pay for solar installations as well as a statewide net metering policy, where homeowners receive bill credits for their solar electricity.

New Jersey

As of the end of 2015, New Jersey had 1,839 MW of installed solar capacity, ranking it fourth nationally. A key driver of this sustained solar demand is the full sales tax exemption offered on all solar equipment. This exemption eliminates the state’s normal 7 percent sales tax and reduces the effective cost of solar equipment in New Jersey. New Jersey residents also benefit from some of the nation’s best solar policies including net metering, where solar homeowners receive bill credits for their solar electricity, a statewide solar renewable portfolio standard and accompanying solar Renewable Energy Credit (SREC) market.

In addition to solar energy system installations, Crius Solar will offer customers in New Jersey an exclusive, low rate on 100 percent green energy through its sister brand Everyday Energy.

“We’re thrilled that one of the three states to reach 1 GW of installed solar capacity is also where Crius Solar begins to turn our vision of providing a better solar experience into reality,” McArthur noted. “As one of the few full-service solar energy providers integrated with a leading retail energy supplier, Crius Solar is uniquely positioned to raise the bar on going solar in New Jersey. We look forward to serving residents of The Garden State for decades to come.”

 

— Solar Builder magazine

SunEdison files for bankruptcy, solar industry comments

SunEdison, Inc. announced that it has “commenced a process to restructure its balance sheet and position the company for the future.” Translation is the company has filed for chapter 11 — a move that had been rumored for awhile now. You may recall its Vivint deal falling through in March, but troubling signs had emerged before then, with industry onlookers unsure about the company’s heavy acquisition strategy.

Sun EdisonSunEdison’s publicly-traded yieldcos, TerraForm Power (NASDAQ: TERP) and TerraForm Global (NASDAQ: GLBL), are not part of the filing.

“Our decision to initiate a court-supervised restructuring was a difficult but important step to address our immediate liquidity issues,” said Ahmad Chatila, SunEdison chief executive officer. “The court process will allow us to right-size our balance sheet and reduce our debt, providing the opportunity to support the business going forward while focusing on our core strengths. It also will facilitate our continued work towards transforming the Company into a more streamlined and efficient operator, shedding non-core assets as well as taking other steps to help us get the most value out of our technological and intellectual property. As a result of this process, we expect that SunEdison will be in an even better position over the long term to utilize our capabilities in the renewable energy sector in service of our customers, business partners, and employees.”

RELATED: Solar energy is the only thing that bridges the partisan divide (Senate passes big energy bill) 

SunEdison has secured commitments for new capital totaling up to $300 million in debtor-in-possession (DIP) financing from a consortium of first and second lien lenders. Subject to Court approval, these financial resources will be made available to the Company to support its continuing business operations, minimize disruption to its worldwide projects and partnerships, and make necessary operational changes.

  • The new financing will support day-to-day operations during the reorganization, including:
  • Proceeding with work on ongoing projects, both in the U.S. and elsewhere;
  • Paying wages and benefits for employees;
  • Continuing to provide services to customers;
  • Paying vendors and suppliers in the ordinary course for goods and services provided on or after the date of the chapter 11 filing; and
  • Complying with all regulatory obligations.

SunEdison has made customary filings, including first day motions, with the Court, which, if granted, will help ensure a smooth transition into chapter 11 without business disruption. The motions are expected to be addressed by the Court promptly following the filing, and include, among other things, a request for approval of the debtor-in-possession financing, as well as requests for authority to make wage and salary payments, continue various benefits for employees, honor certain customer programs, and other relief in order to continue the day-to-day operations of SunEdison.

Solar Industry Reaction

Unfortunately for the solar industry — after a series of positive, momentum-building announcements that spoke to the ascendance of solar power’s PR and value — this headline will likely standout as a black eye. That would be a mistake though, as SunEdison’s approach was an outlier. Don’t take my word for it though:

“This is a highly competitive industry with a massive upside. As with other rapidly growing and successful industries, not every company in the solar market is going to stand the test of time. SunEdison is just one company and today’s development does not reflect a trend of the broader industry. The solar industry is growing at warp speed. It took us 40 years to get to 1 million installations (which we have just done) and it will take us just two more years to hit 2 million and that, I think, illustrates the direction of the solar industry.”

— Dan Whitten, VP of communications for the Solar Energy Industries Association.

“For strongly backed, responsible solar companies who are prepared to understand and address customer needs, the future is brighter than ever. REC Solar will continue to leverage its relationship with Duke Energy as we continue our focus on delivering compelling energy solutions to the commercial customer segment.”

— Alan Russo, SVP Sales & Marketing at REC Solar.

“The travails of one company will not stop the rise of solar power. We stand at a watershed moment where solar technologies are both proven and economical in applications from rooftops to oilfields. This transformation is ushering in an era of energy convergence, where major energy companies will increasingly integrate solar and traditional energy into all that they do.”

–Rod MacGregor, co-founder and CEO of GlassPoint Solar, a leader in solar-for-oil

“SunEdison’s situation is unfortunate, and we hope that it can emerge from bankruptcy successfully. However, a negative outlook of the solar industry as a whole is misguided, as the fundamentals of distributed generation solar have never been better: electricity rates continue to rise and solar continues to get cheaper. Much of the recent turmoil can be attributed to a maturation and disaggregation of the solar value chain as capital and technology are democratized by new financing products and independent software tools. We’re seeing a more level playing field emerge and companies without a focused strategy and clear value proposition will face significant challenges.”

– Conlan O’Leary, Sighten CEO

— Solar Builder magazine

SunEdison, Vivint Solar merger off, Vivint citing breach of agreement

Vivint solarYou may recall back in July 2015 when SunEdison announced its acquisition of residential solar systems provider Vivint Solar for a reported $2.2 billion. Well, the deal was scheduled to expire this month, and ahead of that deadline, Vivint Solar delivered a letter to SunEdison, Inc. last night notifying it that:

As a result of SunEdison’s failure to meet its obligations under the merger agreement pursuant to which the Company was to have been acquired by SunEdison, Vivint Solar has terminated such agreement. Vivint Solar reserves all rights under the merger agreement. In particular, SunEdison’s failure to consummate the merger when required pursuant to the terms of the merger agreement constitutes a willful breach of the merger agreement, and Vivint Solar intends to seek all legal remedies available to it in respect of such willful breach.

In February, SunEdison announced a new strategy for its Solar Materials operations focused on asset-light proprietary silicon production technologies via partnerships and joint ventures. As part of this strategy, the company closed and sold a few facilities.

“We are moving forward on several fronts with our asset-light strategy for the upstream solar materials business,” said Ahmad R. Chatila, SunEdison’s chief executive officer. “We believe our actions to re-engineer this business will maximize the value of our world-leading silicon production technologies, enabling SunEdison’s long term downstream growth and curtailing headwinds caused by trade actions and the commoditization of certain products.”

— Solar Builder magazine

SunEdison to close, sell, refocus some facilities as part of new silicon production strategy

SunEdison, Inc. is moving forward with a new strategy for its Solar Materials operations that is focused on asset-light proprietary silicon production technologies via partnerships and joint ventures. The goal here is to enhance profitability while preserving its high efficiency, cost effective solar panels supply for its downstream solar development platform.

Towards this goal, SunEdison is selling its Kuching, Malaysia, silicon wafer production facility; plans to close its Pasadena, Texas, polysilicon production facility; will refocus its Portland, Ore., operations into a cost effective R&D and technology demonstration center; and said its SMP joint venture is on track to meet key polysilicon production and cost targets.

“We are moving forward on several fronts with our asset-light strategy for the upstream solar materials business,” said Ahmad R. Chatila, SunEdison’s chief executive officer. “We believe our actions to re-engineer this business will maximize the value of our world-leading silicon production technologies, enabling SunEdison’s long term downstream growth and curtailing headwinds caused by trade actions and the commoditization of certain products.”

As a result of these actions, the company expects to report a total of $266 million in non-cash impairment charges and a total of $171 million in other restructuring charges in its fiscal 2015 fourth quarter financial results. It also expects to report approximately $10 million to $13 million in other restructuring charges in fiscal 2016. Further details of these charges can be found in the company’s Form 8-K filed with the SEC today.

Divesting commoditized operations

Sun EdisonSunEdison has signed a definitive agreement to sell its silicon wafer manufacturing plant in Kuching, Malaysia to China-based LONGi Silicon Materials Corporation.

Silicon wafer manufacturing is largely performed by global manufacturers like LONGi, typically as part of a vertically integrated, high-volume business model. LONGi will operate the facility once it assumes ownership. The sale is expected to close in March 2016, subject to customary conditions and regulatory approvals.

As part of the transaction, SunEdison has secured a multi-year supply agreement for up to 3-GW of high-efficiency monocrystalline solar panels from a LONGi subsidiary, subject to certain conditions. This agreement provides SunEdison with security of supply and cost effective solar panels to fuel SunEdison’s global development engine. SunEdison will also supply high-purity polysilicon produced by its proprietary high pressure fluidized bed reactor (HP-FBR) process in SMP, its joint venture facility in Korea, to LONGi.

The sale of the facility will result in one-time impairment and restructuring charges of $35 million that will be reflected in SunEdison’s fourth quarter financial results.

Sustainable operations and production technologies

SunEdison also said that its board of directors on Feb. 16, 2016, decided to permanently close the company’s Pasadena, Texas, polysilicon manufacturing plant. This action was taken in part as a consequence of a Chinese trade action. China has imposed a 53.6 percent tariff on SunEdison’s polysilicon, pricing the American made polysilicon out of the market thereby preventing SunEdison from running the plant.

Polysilicon production has been terminated and seed production will end by the third quarter of 2016. Approximately 180 jobs are expected to be affected by the closure, subject to SunEdison’s collective bargaining obligations.

The closure will result in one-time impairment and restructuring charges of $363 million that will be reflected in SunEdison’s fourth quarter financial results, and approximately $10 million to $13 million in restructuring charges that are expected to be reported in fiscal year 2016.

SunEdison has also decided to refocus its activities at its Portland, Oregon facility. The facility has been consolidated into a cost effective R&D, technology demonstration and training center for future licensees of the company’s continuous Czochralski (CCz) silicon crystal ingot manufacturing technology.

As a result, SunEdison is halting high-volume production of silicon crystal ingot at the facility which is expected to reduce operating expenses to optimize cash utilization. Approximately 40 jobs are affected by the changes. The changes will result in one-time impairment and restructuring charges of $39 million that will be reflected in SunEdison’s fourth quarter financial results.

In addition, SunEdison said that polysilicon production at SMP, its joint venture facility in Korea, is on track to meet its production and cost targets and is ramping up toward full operating capacity. SMP is a state-of-the-art facility for both silane and polysilicon production. SMP leverages SunEdison’s HP-FBR technology to produce high purity, electronic grade polysilicon 10 times more efficiently than other polysilicon manufacturing technologies. This breakthrough reduces the cost of the raw material needed to produce solar panels to less than $0.04 per watt peak, approximately a 2x improvement over other existing technologies.

“This success proves that HP-FBR technology is ready to become the new standard for high quality polysilicon production,” said Dave Ranhoff, SunEdison’s president of Solar Materials. “With our HP-FBR and CCz crystal ingot technologies, we’re ideally positioned to lead in the next generation of solar panels and low cost solar energy.”

SunEdison plans to make its silicon production technologies broadly available through joint venture and licensing agreements.

— Solar Builder magazine

SunEdison now helping to save water in California too

SunEdison signed a solar power purchase agreement with Stockton East Water District in Northern California and will install 2.2 MW of high-performance SunEdison solar panels on the water district’s property. By going solar, the district expects to save more than $9.5 million on energy costs over the next 20 years and 20 million gallons of water annually.

Sun Edison“A SunEdison solar system is a fast and effective way for organizations to reduce their energy costs,” said Sam Youneszadeh, SunEdison’s regional general manager of its Western U.S. solar business. “And it’s a great way to save water too – on average it takes more than four gallons of water to generate each kilowatt-hour of electricity in California. By going solar, we’re able to reduce water use by 99 percent, saving approximately 20 million gallons of water each year. SunEdison has installed solar at more than 1,000 locations in the U.S., saving more than 20 billion gallons of water in the process.”

With SunEdison’s solar power purchase agreement, the water district will enjoy the benefits of solar energy without any up-front cost. SunEdison installs, owns, and operates each system while the district buys the solar electricity at lower rates than offered by their local utility.

RELATED: Twenty-five California schools to install solar parking canopies via SunEdison 

“With no upfront costs and savings starting from day one, we couldn’t be happier with SunEdison,’’ said Scot Moody, Stockton East Water District’s general manager. “We’re expecting to save more than $9.5 million with this project. This is a great example of how we’re looking at new initiatives to save money and be good stewards of the environment.”

The solar systems are expected to generate enough energy to offset approximately 50 percent of the electricity used at the facility. That same amount of electricity can power 650 Californian homes a year.

SunEdison intends to complete the solar system in 2016. Operation and maintenance of the solar systems will be performed by SunEdison Services, which provides 24/7 global asset management, monitoring and reporting services.

— Solar Builder magazine