Solar M&A: How Long Will it Last?
A lot has been made about Solar M&A the past few weeks as solar companies get snapped up or acquire each other's business pipeline. ActSolar was just acquired by National Semiconductor, while Optisolar, Recurrent Energy and a number of others have been involved in acquisitions of business pipeline and assets recently. At issue for most is the ability to get funding and for others it is the ability of their customers to get loans or bonds to finance a solar installation.
How long will this last? The answer lies in Washington where Public Affairs teams for solar companies are working to tap stimulus money and where the financial market bailout will likely begin to free up the ability of solar consumers (business, consumers, government) to get loans and finance projects. For solar manufacturers, it depends on the ability of solar companies to get grants and loan guarantees, a la Solyndra, BrightSource and others, to finish projects and expand operations.
In the residential market, home values (many people use home equity for downpayments on power purchase agreements or to pay for systems) play a big role, as do tax breaks and the long-term adoption of feed-in tariffs. Gainesville was recently the first municipality in the US to adopt a solar feed-in tariff and the interest was unprecedented. Feed-in tariffs were one of the major drivers of residential and commercial solar adoption in Germany, making it the number one solar market in the world.
My guess? The combination of all of the aforementioned government policy measures, combined with the return of credit markets and a slightly improving economy will help stabilize many solar companies for the rest of the year, allowing them to survive the current turmoil. I strongly believe that the combination of solar-friendly public policy, legislation, government incentives and the recovery of energy prices and the broader economy will return the market to a boom phase in 2010.
Tags: brightsource, feed+in+tariffs, feed-in+tariffs, ITC, solar+M&A, solar+public+affairs, solyndra, stimulus+money
Posted by Jason Morris on March 24, 2009 at 8:31 PM
