As part of the company's ongoing efforts to focus on manufacturing business alone, First Solar, Inc. has agreed to sell its US project development platform with 10 GW AC utility scale solar capacity to Leeward Renewable Energy Development, LLC. Back in September 2019, First Solar discontinued its internal EPC division, making Series 6 manufacturing its top priority (see First Solar To Do Away With EPC Division In US). In 2020, First Solar also sold off its North American O&M business to Clairvest Group's NovaSource (see First Solar Grows Gross Profit In Q2/2020).
"Enabled by our Series 6 module's seamless compatibility with industry systems and processes, the sale is part of a transition that allows us to focus on doing what we do best, which is scaling, developing, and selling our world-class module technology," explained First Solar CEO Mark Widmar who said this decision is a result of the 'strategic review' the company announced in 2020. Some key members of the project development team will also transition to Leeward as part of the deal. Financial terms of the deal were not disclosed.
First Solar's 2 Ohio based manufacturing locations in the US total up to 1.9 GW DC capacity annually making it the largest PV module maker in the US. In addition, it also manufactures in Malaysia and Vietnam. After selling the 10 GW AC platform to Leeward, First Solar will be left with 1.1 GW AC capacity in the US which it will sell separately.
Under the transaction, expected to close in 2021, Leeward will acquire 773 MW AC of projects expected to enter construction over the next 2 years, along with the operational 30 MW AC Barilla Solar Project. Projects under the 10 GW AC pipeline are spread across California, Southwest and Southeast markets.
"In total, upon closing, Leeward's acquisition of the project platform will comprise the acquisition of projects with module purchase orders, together with the entry into additional purchase orders, of approximately 1.8 GWDC of First Solar PV modules, of which 744 MWDC represent new bookings as of closing," informed First Solar.
A portfolio company of OMERS Infrastructure which itself is the investment arm of Canadian benefit pension plans, OMERS, Leeward said the transaction with First Solar backs its aggressive growth strategy to become a leading independent power producer. "Solar and renewable technologies continue to advance and now provide economically viable solutions in virtually every market in the US," said Leeward's CEO Jason Allen. "We will continue to grow our wind, solar, and storage presence so we can continue to provide clean energy to our existing and future customers as they pursue their net-zero emission goals."
The deal expands Leeward's solar development pipeline to 14 GW, located across key markets for the company in the US.
Roth Capital's Philip Shen commented on First Solar's deal, "Without detailed financials on how profitable this business is along with the development opex, it's tough to assess the impact to the company's financials. Historically, the company's development arm was a key driver of module sales. Our recent checks suggest the First Solar development team would specify and require projects to use FSLR modules to ensure project buyers would be obligated to purchase FSLR modules. Now, without a development platform, a key question for us is how does FSLR drive module sales post-development platform sale."