New Energy Solar and SunPower Corp. (NASDAQ: SPWR) today announced that New Energy Solar has acquired a substantial majority interest in two large-scale solar projects, totalling over 134 megawatts (MW), that SunPower developed, designed and constructed in Kern County, California. SunPower will retain an ownership interest in the projects, which each having a capacity of 67.4 MWs, and provide ongoing operation and maintenance services.
Stanford University has a long-term agreement to purchase 100 percent of the power, as well as the renewable energy credits (RECs), generated from one of the projects, the Stanford Solar Generating Station. Turlock Irrigation District (TID) has a similar agreement to buy the power and RECs generated from the second project, the TID Solar Generating Station.
“We believe the quality of these projects, both in terms of SunPower’s leading technology and their highly creditworthy off-takers make them excellent additions to our portfolio,” New Energy Solar CEO Tom Kline said. “We are proud to partner with SunPower, one of the most experienced and leading developers and operators of utility-scale solar power.”
Both Stanford University and TID will use the renewable power generated in Kern County to serve electricity demand approximately 300 miles away. Projects like these demonstrate the flexibility with which organizations can now take advantage of cost-effective solar power by using larger capacity off-site solar resources to reliably serve a greater percentage of demand.
“Stanford University and TID are using an innovative model called off-site solar to meet their renewable energy goals and serve their constituencies with cost-competitive emission-free solar power,” said Nam Nguyen, SunPower senior vice president. “Off-site solar allows for land-constrained organizations to benefit from the economies of scale achieved with larger solar installations. We congratulate New Energy Solar on their leadership in recognizing the value of this model and thank them for their partnership.”
At both sites, SunPower installed the SunPower Oasis® Power Plant technology, a fully integrated, modular solar power block that is engineered to rapidly and cost-effectively deploy large solar projects while maximizing power generation and optimizing land use.
Construction of both projects commenced in the middle of 2015. Both facilities are expected to achieve commercial operation this month.
There are more than 2.6 gigawatts of SunPower solar power plants operating worldwide.
New Energy Solar’s full investment will occur upon the satisfaction of certain conditions, including, connection to the electrical grid, satisfaction of certain testing criteria, and the projects’ commercial operation.
MVP Capital advised New Energy Solar on the transaction, with Foley & Lardner LLP acting as legal counsel for New Energy Solar.
Impact on New Energy Solar
These two projects are expected to generate a five-year average yield of approximately 6.5 percent per annum (before New Energy Solar’s impact of borrowing and tax). With the addition of the California projects, New Energy Solar will own a portfolio of over 200MW DC of large scale solar farms underpinned by highly creditworthy off-takers and have a weighted average power purchase agreement term of 17 years.
New Energy Solar’s Tom Kline said, “Once our assets in North Carolina and California are fully operational, we estimate the portfolio will generate enough power to supply 52,000 homes and abate an estimated 244,000 tonnes of carbon dioxide annually when compared with a coal-fired alternative plant; the equivalent of taking more than 57,500 cars of the road.”