Today marked a milestone for Recurrent Energy – we announced the acquisition of 350 MW of solar development assets from UPC Solar. The transaction significantly strengthens our North American presence and is a reminder of the power of a strong balance sheet in uncertain economic times. This deal promises to improve the terms we are able to offer our customers through economies of scale, which is key to driving the adoption of distributed solar power globally.
This deal was attractive for two primary reasons:
- Feed-in Tariff: The Ontario Power Authority recently announced the pricing of their feed-in tariff. When implemented, the tariffs would represent the first North American equivalent to policies that are driving substantial solar power development in Germany and Spain.
- Increasing International Expansion: Recurrent Energy has been expanding internationally to diversify market risk, and believes that the quality of projects, the team in place, and the additional development opportunities that UPC Solar brings to the table meet our project criter.
Recurrent Energy will now develop, build, and operate the acquired solar projects, targeting 100 MW+ of operational assets by 2012. The projects are located across the continental US, Hawaii and Canada, with numerous 10 MW photovoltaic plants located throughout Ontario, Canada. The pipeline is a perfect fit for Recurrent Energy, which focuses on smaller distributed-scale power assets ranging from 2-20 MW.
This deal parallels other recent solar market activities that show how strong, well-capitalized developers are making moves and acquiring valuable assets as a result of the financial crisis and falling module ASPs. Combined, these acquisitions showcase the beginning of a larger wave of consolidation in both upstream and downstream solar markets. This is a painful but beneficial process and those left standing will represent a stronger and healthier industry. Recurrent Energy will continue to evaluate other solar pipeline opportunities as we grow our business in this time of opportunity.
Lastly, I would like to thank the team at UPC Solar that developed this high quality solar project pipeline. In bringing these projects to commercial operation, Recurrent Energy will significantly advance our global clean energy objectives.