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A Closer Look at SunPower’s Project Pipeline and Liquidity

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SunPower’s current Holdco projects

SunPower (SPWR) intends to retain certain assets on its balance sheet to optimize the economic value received at the time of sale. The company holds these assets under its “Holdco” structure.

As of April 3, 2016, SunPower had a total of 1,544 MW (megawatts) under its current Holdco projects. Out of that 1,544 MW, 1,101 MW corresponds to its Power Plant segment, 158 MW corresponds to its Commercial segment, and the remaining 285 MW are categorized under its Residential segment. The majority of SunPower’s current Holdco projects are either contracted or currently in operation.

A Closer Look at SunPower's Project Pipeline and Liquidity

According to company filings, SunPower had about $663 million as a current portion of its project assets on its balance sheet, as compared with $480 million as of January 3, 2016.

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Late-stage project pipeline

As of April 3, 2016, SunPower had its 86 MW Prieska Solar Project in South Africa under contracted status. A substantial portion of the Prieska Solar Project is expected to be complete in 2016, and the company anticipates that it will recognize $23.2 million upon completion.

A Closer Look at SunPower's Project Pipeline and Liquidity

According to company filings, SunPower had about 489 MW of solar projects under projects with executed PPAs (power purchase agreements) but not contracted or not under “sold” status as of April 3, 2016. SunPower expects the substantial completion of these projects by the end of 2016. In 1Q16, SunPower closed the sale of its 50 MW Hooper project to its yieldco, 8point3 (CAFD).

Apart from the above, SunPower had more than 2.5 GW (gigawatts) in its future project pipeline in Latin America and a global project pipeline exceeding 14 GW as of April 3, 2016.

Liquidity position

The upstream solar (TAN) industry is a capital-intensive industry. It’s thus very important for companies like SunPower, First Solar (FSLR), SunEdison (SUNEQ), Trina Solar, and Canadian Solar (CSIQ) to maintain their liquidity positions to raise capital at lower rates.

As of April 3, 2016, SunPower had $555.2 million in cash and cash equivalents. Moreover, the company had about $300 million available under its revolving credit facility.

In the next and final part of this series, we’ll see what analysts are expecting from SunPower’s future earnings.

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