Google Taps SunPower's Residential Solar Portfolio

SunPower is a growing force in residential solar, and Google is its latest financing partner.

Apr 23, 2014 at 2:38PM

SunPower's (NASDAQ:SPWR) shares are popping today after the company announced a new residential solar financing deal with Google (NASDAQ:GOOG) (NASDAQ:GOOGL). On a stand-alone basis, the $250 million in financing isn't all that unusual. It's a pretty standard deal in today's solar market, but the company investing and the fact that SunPower will own more than half of the financing are important to note.

Spwr Residential New Home Community

Residential solar communities like this one are growing across the country. Photo: SunPower

Betting big on residential solar
The financing package is for $250 million and consists of about $100 million from Google and $150 million from SunPower. Google's investment is key because it has a ton of cash on its balance sheet to put into projects like this and is a big renewable energy investor with $1 billion already invested. But it also shows a continued shift away from developing its own projects and technologies -- as it did at the 392 MW Ivanpah concentrated solar project -- to investing in more traditional markets with a solar partner.  

Spwr Residential Close Up

Google and SunPower are financing thousands of individual rooftop installations like this one.  Photo: SunPower

Maybe more important is the fact that SunPower will finance more than half of the project. The early equity financing of projects comes with high returns on equity, but it also requires net income to effectively use tax breaks. SunPower is now able to finance some of its own projects and take advantage of these tax breaks because it's profitable.

We may also be seeing the groundwork for a YieldCo or another type of investment vehicle that SunPower could launch later this year. The company already said it will hold utility-scale projects on its balance sheet this year as it prepares for a YieldCo, and eventually residential assets would be attractive in that kind of spinoff.

Solar financing is becoming big business
The big advancement in the last year in solar is the growing number of companies willing to finance solar projects. Tech companies don't seem like a natural partner on the surface but many have billions in cash sitting on their balance sheets in search of yield. Solar can provide that and give some good public relations along the way.

I'd expect this to be the first of many financing packages between tech and solar, and Google will continue to be active in this market.

The energy industry is changing rapidly
Exploration and production of new energy is exploding in the U.S. and The Motley Fool is offering a look at three energy companies using a small IRS "loophole" to help line investor pockets. Learn this strategy, and the energy companies taking advantage, in our special report "The IRS Is Daring You To Make This Energy Investment." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

Travis Hoium manages an account that owns shares of Berkshire Hathaway and SunPower. He also owns shares of and has options on SunPower. The Motley Fool recommends Google (C shares). The Motley Fool owns shares of Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers