OptiSolar, First Solar strike deal
Stunted by the nation’s credit freeze, troubled OptiSolar Inc. of Hayward, Calif., has agreed to sell its portfolio of unfinished solar farms to one of the hottest firms in the solar industry.
First Solar Inc. said Monday that it would pay OptiSolar $400 million in First Solar stock to buy the outstanding projects, which the Tempe, Ariz., company intends to complete.
The portfolio includes a planned 550-megawatt facility in San Luis Obispo County known as the Topaz Solar Farm. The facility’s electricity has been sold on a long-term contract to Pacific Gas & Electric Co., with first delivery slated for 2011.
The sale gives OptiSolar a way to make good on its legally binding power contracts, as well as a much-needed capital infusion. Launched in 2005, the privately owned company manufactures its own thin-film photovoltaic panels to supply solar farms that it planned to develop and manage.
But fallout from the economic crisis put a dent in those plans. OptiSolar last month fired 290 employees -- nearly half its workforce -- after it failed to secure financing to complete a planned expansion of a manufacturing facility in Sacramento.
OptiSolar is seeking government loan guarantees under the recently approved federal stimulus plan to get the company moving again, spokesman Alan Bernheimer said.
Meanwhile, First Solar is hitting its stride. The photovoltaic manufacturer has scored deal after deal, even in a lousy economy, thanks to a proven track record and rapidly declining prices for its thin-film solar panels. Sempra Energy, Southern California Edison and Edison Mission Energy have all chosen First Solar as their supplier for large-scale photovoltaic projects.
First Solar stock closed at $103.97, down $1.77, on Monday. Its transaction with OptiSolar is expected to close in the second quarter.
State law requires California’s investor-owned utilities to procure 20% of their electricity from renewable sources by 2010. The utilities have signed contracts with a number of start-up firms. But the deepening recession has many analysts predicting a shakeout of weaker firms, with well-capitalized companies such as First Solar standing to benefit.
PG&E; said Monday that it expected no hiccups with the Topaz Solar Farm.
“We’re looking forward to working with First Solar,” said PG&E; spokeswoman Jane Oliveira. “We are confident in their commitment to the project.”
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