When an industry is born, it's like a living organism, constantly changing and evolving. Sometimes it ends up looking nothing like what it started as.

The solar industry has gone through changes gradually since busting out 10 years ago. Manufacturers like First Solar (Nasdaq: FSLR) and SunPower (Nasdaq: SPWRA) have become big project developers and Chinese competitors are starting to follow. But an emerging business model is also starting to become more prevalent as these companies grow: the joint venture.

  • SunPower formed a joint venture with AU Optronics (NYSE: AUO) to build the 1.4-GW solar cell fabrication plant called Fab 3.
  • Sharp, one of the world's largest solar manufacturers, formed a $128 million joint venture with Enel Green Power and STMicroelectronics. The plant will produce 160 MW of thin-film solar cells and is expandable to 480 MW.
  • Last week, Canadian Solar (Nasdaq: CSIQ) signed a joint venture with Suzhou New District Economic Development Group and Suzhou Science and Technology City Development. Canadian Solar will contribute 61% of the equity to the 600-MW plant, which can be expanded to 1.3 GW to 1.4 GW.

Joint ventures allow solar manufacturers to build capacity more quickly without raising capital. SunPower has been especially aggressive in the last year, partnering with AUO and Total (NYSE: TOT), which will provide debt financing along with taking an equity stake.

Similar ventures are also taking place downstream, where investors like NRG (NYSE: NRG) are partnering with manufacturers like SunPower to build solar plants. The two companies are currently working on the California Valley Solar Ranch, where NRG contributed $450 million of equity capital.

One of the challenges for growing companies is generating enough cash to support the infrastructure needed to grow. Solar manufacturers are finding that getting infusions from the outside is much more effective than going back to shareholders with their pockets turned out. At least some of them.

Also on the solar news wire
LDK Solar (NYSE: LDK) has completed a $240 million sale of its polysilicon business to the China Development Bank. The deal values the business at $1.3 billion.

LDK has been under pressure lately, postponing a debt offering and watching its shares drop from the sky. LDK has been hit harder than most solar manufacturers because it tried to expand quickly using mostly debt financing. Maybe a joint venture here and there would have been a better way to go? We'll know more about the company's position later today, when it announces earnings, but the cash infusion is a plus in the short term.