Last week Solar Trust of American parent Solar Millennium AG, a German company, announced a tentative deal to sell its U.S. operations to another German company, solarhybrid AG. The move comes after Solar Millennium decided to convert the first 500 megawatts of its Blythe Solar Project in California from concentrating solar power (CSP) to photovoltaics, in light of the steep reduction in cost for PV.
The conversion to PV from CSP was a step in a new direction for Solar Millennium. But the company plans to refocus its efforts on CSP with the sale.
In those regions, Solar Millenium will develop solar thermal and hybrid solar power plants, the company said in a press release.
“In the US, the company will be available as a project partner as soon as the demand for storable solar energy starts growing there once again, with the parabolic trough technology being its specialty,” it said. The company will also profit-share in the U.S. “The agreement stipulates that Solar Millennium AG will receive a significant profit-share upon construction of the power plants in the US in addition to being reimbursed its entire investment in the projects.”
Under the proposed deal, Solar Millennium would sell its entire 2,250 megawatt project pipeline, consisting of four projects, in the U.S. to solarhybrid, Sullivan said.
The company’s pipeline in the U.S. included the 1,000-megawatt Blythe plant, the 500-megawatt Palen Solar Power Project near Desert City, Calif., and the 500-MW Amargosa Farm Road Solar Project near Las Vegas. He could not disclose the purchase price of the deal, since it is still tentative and the companies are doing due diligence this month.
solarhybrid will develop projects through a wholly owned subsidiary, solarhybrid USA LLC. But so far the company doesn’t have any projects in the U.S.
“This would be their entry point,” Sullivan said.
As a subsidiary of Solar Millennium, Solar Trust also would be acquired under the proposed deal.
“In the contemplated agreement, [Solar Trust of America] would be sold to solarhybrid. It would acquire the company, the workforce and the project pipeline,” he said.
Since solarhybrid is a PV developer, it could change the face of all Solar Trust projects.
“With solarhybrid they’re exclusively a PV developer. It’s contemplated that Solar Trust would consider or look into converting our other projects to PV as well,” he said.
That includes the possibility of converting the rest of Blythe to PV.
The conversion process shouldn’t affect projects’ timelines, according to Sullivan.
“Hoping to have a smooth transition and look forward to moving forward with the permitting process,” he said.
Some amendments will be required, but he doesn’t anticipate significant delays even if the projects are converted to PV from CSP.
Image courtesy of Solar Trust.