Earnings season is over and it seems most of the market is slowing down before the end of summer. But the solar industry continues to make news, both good and bad.
This week, the industry showed some bad signs for some formerly major players. For investors, the weakness in some solar companies means less competition as the industry matures and the strong survive this highly competitive market.
Yingli Green Energy's drama
It wasn't long ago that Yingli Green Energy was the biggest solar manufacturer in the world. But those days have come and gone, and the company is now all but bankrupt and falling further behind solar competitors, who are spending 2017 upgrading manufacturing equipment.
The news this week was that bondholders of medium-term notes due May 12, 2016, have sued the company to be paid what they're owed. This is understandable because the debt was due over a year ago, but Yingli Green Energy doesn't have the money to pay them. Management said in a press release that it is trying to negotiate with all of the medium-term note holders, but this is another sign that Yingli Green Energy is on its last leg. It's a cautionary tale of growing too fast, taking on too much debt, and how that can leave a solar manufacturer in an extremely weak position when competitors have the funds to invest in new equipment that makes you obsolete.
SunPower's busy week
It's very clear that SunPower (NASDAQ:SPWR) is trying to position itself differently to investors in 2017. The company has been releasing project signings regularly, something it hasn't always done, and it's focusing on commercial projects that highlight its high-efficiency and energy storage offerings.
This week, SunPower announced that it will deliver 3.9 MW of solar carports to Santa Rosa Junior College in California and will pair the systems with a 1.3 MW (2 MWh) energy storage system from Stem.
It also highlighted its program to sell solar energy to auto dealers, who count electricity as one of their biggest operating costs. The systems highlighted this week were 454 kW of capacity in 10 systems for Luther Auto Group in Minnesota, 125.6 kW of capacity in five systems at Covert Auto in Texas, and 50 kW at Boulder Nissan in Colorado. These may sound small, but commercial solar systems are a key part of SunPower's business. If it can grow the $2 billion it currently has in backlog, we'll be seeing success in the Helix commercial solar products that should be dominating the market because of their superior efficiency.
Finally, SunPower is helping construct 8.2 MW of solar power systems in France for Voltalia, a renewable energy developer. Half of the installations will be high-efficiency solar modules and the other half will be concentrating trackers. This shows some of the progress SunPower has made in France, where its parent company Total (NYSE:TOT) is located and where SunPower itself has a large backlog of utility and commercial projects.
News and notes
Here are a few more important notes from the solar industry this week.
- Renesola got its second delisting notification from the NYSE, and is considering how to stay publicly listed. One possibility is to sell the solar manufacturing business to CEO Xianshou Li, who would also take on about $573 million in debt and about $200 million in payables. There wouldn't be much of a business left if the company sells its manufacturing operations, so this could be another company in long-term trouble like Yingli.
- Canadian Solar (NASDAQ:CSIQ) announced this week that it has started commercial operation on a 27.3 MW power plant in Tottori Prefecture, Japan. The project is selling energy to Chugoku Electric Power Co., Inc under a 20-year feed-in tariff for $0.32 per kWh. That's an extremely high price, which will make this an extremely valuable project if Canadian Solar chooses to sell it.
- Hawaiian Electric, a subsidiary of Hawaiian Electric Industries (NYSE:HE), proposed a new grid modernization strategy to regulators that would see $205 million spent over the next six years to upgrade the electric grid. Smart meters, advanced inverter technology, and better voltage management tools are being proposed to allow more rooftop solar in the state. This will help make solar energy a more viable option for homeowners, who may be able to integrate energy storage or simply install a standard solar power system if these upgrades are put in place.
- This week, Duke Energy (NYSE:DUK) announced a deal with the Florida Public Service Commission to install 700 MW of solar energy capacity over the next four years and includes investments in smart meters, grid modernization, and a battery energy storage pilot program. This is notable because Duke and Florida have both fought solar energy for years and this may indicate a changing of the tides.
That's all for this week in solar. Check back to fool.com next week for more solar coverage.