When investors think about the locations that solar companies are relying on for demand, France may not be the first one that comes to mind. The country isn't particularly big in the solar industry -- it aims to install just 2.7 gigawatts (GW) this year, out of the approximately 120 GW that is expected to be installed globally. But there's one solar company in particular that's focused on taking as large a share of that business as it can get. 

SunPower (SPWR 0.63%) and its parent Total (TTE 0.58%) have won as much as one-third of France's solar power tenders, and with 2.7 GW allocated this year and 2.9 GW each of the next five years, the stakes are worth billions. 

Large solar installation in a field.

Image source: SunPower.

SunPower's symbiotic relationship with Total

SunPower isn't directly a leader in development in France, but it leans on parent company Total to build -- and sometimes own and operate -- projects. Solar is part of the oil and gas giant's strategy to diversify its energy mix, and guaranteed rates in France provide it with a good development opportunity. 

Since SunPower moved out of the business of large-scale solar power system development, Total has stepped in, offering solutions from SunPower around the world. Both companies hope this will lead to large opportunities elsewhere. 

Why France works for SunPower

The French market is a nice foundation for both SunPower and Total. For SunPower, it provides steady demand for solar panels to be used in everything from large-scale projects to rooftop installations. In a relatively high-cost market, SunPower's high-efficiency products have proven attractive because they squeeze more energy production from each square foot. 

For Paris-based Total, operating in France offers a bit of a home field advantage when it comes to finding solar project opportunities. The company can also easily collect data about the cost of building projects and the performance of solar systems, which will help it develop models for further development. As it invests more in renewable energy assets, it'll also slowly shift its earnings structure to include these assets, which investors will become accustomed to over time. Energy companies that have tried to shift too quickly to renewable energy have struggled to convince investors that the strategy is a sound one, because the financial results look so different from those of traditional energy businesses. 

In short, investors should view France as a testing ground for Total, and a place where SunPower can prove its technology excels in a competitive, but mature, market. 

A steady stream of demand

Building solar in France can provide both SunPower and Total with a steady stream of demand each year under a solid regulatory framework -- something which many developing countries lack. That's a strength for both companies, and their partnership is beginning to bear fruit. 

The next step on the road to making it a true success will involve taking what they're learning, and applying it to larger projects in the Middle Eastern, African, and South American regions where Total has a presence in oil and natural gas production. Together, they could become a power couple in renewable energy globally.