As the U.S. solar market comes under attack from potential solar tariffs, SunPower Corporation (NASDAQ:SPWR) has to be worried demand will deteriorate before its eyes. The U.S. is the company's single biggest market and uncertainty around it has crushed SunPower's stock in the last few months.
When times get tough, SunPower has the unique ability to turn to Total (NYSE:TOT), its largest shareholder and an oil giant trying to figure out its path to a renewable future. Together, they may have a plan that will make both companies better and it starts in Total's home country of France.
France emerges as a key for SunPower
For years, SunPower has talked about how Total would be a key partner in solar project development. The company has networks in the Middle East and Africa that SunPower may not be able to exploit itself. But for a long time, it wasn't clear how the companies would really work together.
France's tenders in 2017 have shown a path that could provide a blueprint for the future. Through tenders announced earlier in October, Total and SunPower have won 505 MW of project tenders, enough to power 82,000 homes in France. A tender of 130 MW in March was for 25 ground mounted and carport projects and October's award was for 32 MW on 70 building and carport projects across the country.
In total, 1,450 MW will be tendered each year from 2017 to 2019 with the third and final round of the year in November. So far, SunPower is the leading supplier of solar panels in the French tenders in 2017 and suddenly France has become one of its most important markets.
Will SunPower/Total be a strategy of the future?
SunPower used to be a developer of these kinds of projects but has made a transition to supplying "solutions" to customers. This includes turnkey solar and energy storage solutions for residential, commercial, and utility-scale projects.
In France, Total is stepping into the development role, a position that will continue to grow. Not only is Total going to be a force in the development of solar projects, Total acquired 23% of EREN Renewable Energy to develop solar power plants in emerging markets. It's possible, even likely, that both development arms will pull solutions from SunPower, which would be great news for the solar manufacturer. If a steady flow of project demand comes SunPower's way through Total it would be a huge boon for the business.
Total and SunPower are better together
Don't sleep on Total and SunPower becoming a growing force in solar energy around the world. Total has the balance sheet to fund projects and SunPower has the solutions and needs the development partner Total is building. France may be a blueprint for the future of both companies.