First Solar and SunPower previously announced they were joining together to form a YieldCo to provide financing for their solar projects. Today (June 19) they announced the $420 million initial public offering (IPO) for their YieldCo, 8point3 Energy Partners LP. 8point3 Energy is trading on the NASDAQ Global Select Market under the symbol “CAFD".
8point3 Energy is offering 20 million shares at $21 a piece. The funds raised by the YieldCo will allow the companies to reduce the rate of financing for solar projects. The limited partnership company will use the funds to purchase, own and operate a portfolio of solar projects owned by 8point3 Operating Co. The operating company will make cash distributions First Solar and SunPower for general corporate purposes, which will include the ability to fund future acquisition opportunities.
After the offering is complete First Solar will own 31.1 percent of the shares and SunPower will own 40.7 percent of the shares, Reuters previously reported.
The projects the YieldCo can purchase will vary ranging from utility-scale projects—both First Solar and SunPower have built some of the largest PV farms in the world—to residential projects. The YieldCo will purchase projects domestically and in countries that comprise the Organization for Economic Co-operation and Development, according to 8point3.
The initial portfolio consists mainly of projects in California and represents a portfolio of 432 megawatts of solar panel projects. Fully 87 percent of the projects in the portfolio are utility-scale solar projects. That consists of six solar farms—four of which are operational. The other two are in late stages of construction, according to the companies. The rest of the portfolio, 13 percent, consists of residential rooftop solar arrays leased under long-term contracts.
According to the Form S-1 filed with the Securities and Exchange Commission, 8point3 Energy also is being offered the opportunity to purchase 1,131 megawatts of projects from the SunPower and First Solar. The YieldCo will have right of first offer for the future and current projects that it can then offer shares of.
As 8point3Energy projects developed by First Solar or SunPower will be purchased by the YieldCo. The projects purchased will generate long-term predictable cash flows for their shareholders, as such the rates of return are lower than other forms of financing like traditional bank loans. The average length of contracts in the portfolio is for 21 years.Tweet