A Closer Look at SunPower’s Project Pipeline and Liquidity
SunPower’s Holdco projects
SunPower (SPWR) retains certain assets on its balance sheet to optimize the economic value received at the time of sale. These assets are held under the company’s Holdco structure.
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As of October 2, there are 1,602 MW (or megawatts) of projects under its Holdco structure. Of this total, 943 MW corresponds to the power plant segment, 413 MW corresponds to the residential segment, and the remaining 246 MW are categorized under the commercial segment.
The major portion of the current Holdco projects is either currently operating or contracted. The company’s 825 MW projects are contracted, and 565 MW are in operation. Around 211 MW are under construction.
According to company filings, SunPower had about $364 million as a current portion of its project assets on its balance sheet, compared to $374 million as of January 1.
As of October 1, SunPower had about 627 MW of solar projects that have executed PPA (power purchase agreements) but are not contracted or sold. The company anticipates substantial completion of these projects by the end of fiscal 2018.
The solar power (TAN) industry is very capital-intensive. To maintain their liquidity position, companies like First Solar (FSLR), JA Solar (JASO), and Canadian Solar (CSIQ) have to raise capital at low rates.
As of October 1, 2017, SunPower had $275 million in cash and cash equivalents. The company currently doesn’t have borrowings under the revolving credit facility.
In the next part of this series, let’s look at what analysts are expecting from SunPower’s future quarters.