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Sharp buys US solar project developer
- — 22 September, 2010 15:06
Sharp will acquire Recurrent Energy, a U.S. developer of solar energy projects, in a deal that will give the Japanese company a stronger position in the fast-growing solar-power generation business, the companies said Wednesday.
Sharp has been ramping up production of solar panels but the deal to acquire the San Francisco-based company stands to transform Sharp from a supplier of panels into that of a partner of power companies involved in solar generation projects. Recurrent Energy develops and markets solar-based power generation projects and has a string of deals with utilities in the U.S. and overseas.
"It is essential for Sharp to function as a developer in the photovoltaic field, in order to further expand its business in this area," the Japanese company said in a statement.
The deal is the first acquisition Sharp has made in the solar energy space. The Japanese company will pay up to US$305 million for complete ownership of Recurrent Energy. The acquisition is subject to regulatory approval and is expected to be completed before the end of this year. Sharp said the acquisition price could be lower depending on aspects of the approval, but declined to be more specific.
Earlier this year, Sharp embarked on a big expansion of its solar-panel production capacity when it opened a new factory in Sakai, western Japan. The new plant had an initial production capacity of 480 megawatts, which represented a 62 percent boost in Sharp's production capacity, but could eventually produce as much as 1GW of panels per year.
Sharp is battling for share in a fast growing market.
Demand for solar products in the April to June quarter, the latest for which data is available, was 3.82 gigawatts, up 54 percent from the previous quarter, according to analysts at SolarBuzz. Industry revenues were US$17.2 billion, up from $6.2 billion in the same period of 2009.
Recurrent Energy's work includes projects in the U.S. and overseas. It has a 170 megawatt project with Ontario Power Authority, 60MW with the Sacramento Municipal Utility District, and 50MW with Southern California Edison. It also has agreements and projects in Europe and the Middle East.
Sharp has several projects of its own, including a deal with Kansai Electric Power in Japan to build a 10MW solar generating plant. It also has a venture with Italy's Enel to build a string of solar electricity plants in Italy, Spain and France.