OMERS Infrastructure Acquires Major Solar Platform

Kelly Pickerel, editor in chief of Solar Power World, reports that First Solar sells 10-GW utility-scale development pipeline to Leeward Renewable Energy:

First Solar has entered into a purchase and sale agreement with Leeward Renewable Energy Development, in which Leeward will acquire First Solar’s utility-scale project platform of approximately 10 GW_AC. The transaction is expected to close in the first quarter of 2021.

Headquartered in Texas, Leeward is a portfolio company of OMERS Infrastructure, an investment arm of OMERS, one of Canada’s largest defined benefit pension plans. Upon closing of the transaction, Leeward will acquire the U.S. project platform, which includes the Rabbitbrush, Madison, Oak Trail, Horizon, and Ridgely projects that are expected to commence construction in the next two years, as well as the 30-MW_AC Barilla Solar project, which is operational. First Solar will retain 1.1 GW_AC of projects in the United States that are expected to be sold separately. Key members of the First Solar project development team are also expected to join Leeward upon closing.

Subject to closing of the acquisition, Leeward will purchase 650 MW_DC of First Solar’s Series 6 solar modules for its additional development opportunities. Leeward’s acquisition of the project platform also includes purchase orders for 888 MW_DC of Series 6 modules for the five development projects referenced above. Additionally, Leeward’s acquisition of the project platform will include 242 MW_DC of Series 4 modules safe-harbored under the solar ITC program, 148 MW_DC of which has previously been booked. In total, upon closing, Leeward’s acquisition of the project platform will comprise the acquisition of projects with module purchase orders, together with the entry into additional purchase orders, of approximately 1.8 GW_DC of First Solar PV modules, of which 744 MW_DC represent new bookings as of closing.

“This acquisition will support our aggressive growth strategy as a leading independent power producer and elevate Leeward’s prominent position in today’s energy market,” said Jason Allen, chief executive officer, Leeward Renewable Energy. “The public recognizes that renewable energy is a key driver in combating the global issue of climate change. Solar and renewable technologies continue to advance and now provide economically viable solutions in virtually every market in the US. We will continue to grow our wind, solar, and storage presence so we can continue to provide clean energy to our existing and future customers as they pursue their net-zero emission goals.”

“The sale of the platform is a result of the strategic review we announced in 2020 and we’re pleased that it will be acquired by Leeward, a company that shares our values and vision for a sustainable energy future,” said Mark Widmar, chief executive officer, First Solar. “Enabled by our Series 6 module’s seamless compatibility with industry systems and processes, the sale is part of a transition that allows us to focus on doing what we do best, which is scaling, developing, and selling our world-class module technology.”

First Solar announced last year it would get out of the installation game to instead focus on manufacturing its brand of thin-film solar modules.

Business Wire also reports on this deal:

Leeward Renewable Energy, LLC (“Leeward”), a growth-oriented renewable energy company and portfolio company of OMERS Infrastructure, today announced that it has entered into a Purchase and Sale Agreement (the “Agreement”) with First Solar, Inc. (NASDAQ: FSLR), through which Leeward will acquire from First Solar a utility-scale solar project platform of approximately 10-gigawatts (GW)_AC.

Upon closing of the transaction, Leeward will acquire the project development platform, which includes 773 megawatts (MW)_AC of projects that are expected to commence construction in the next two years, as well as the 30-MW_AC Barilla Solar Project, which is operational. The pipeline includes projects in the California, Southwest and Southeast markets, which are geographically complementary to Leeward’s portfolio. The transaction will enable Leeward to expand its geographic footprint, furthering Leeward’s position in the U.S. renewable energy space. Key members of the First Solar development team are also expected to join Leeward upon closing.

Jason Allen, Chief Executive Officer of Leeward, said, “We look forward to welcoming the new team members who will join Leeward in connection with this transaction. The acquisition of this development platform from First Solar will support our aggressive growth strategy as a leading independent power producer and elevate Leeward’s prominent position in today’s energy market. The public recognizes that renewable energy is a key driver in combating the global issue of climate change. Solar and renewable technologies continue to advance and now provide economically viable solutions in virtually every market in the U.S. We will continue to grow our wind, solar, and storage presence so we can continue to provide clean energy to our existing and future customers as they pursue their net-zero emission goals.”

Tom Frazier, Managing Director, OMERS Infrastructure, said, “We are delighted to support today’s announcement as a key milestone for Leeward, and look forward to continuing to support Leeward’s growth. This news represents an integral next step for Leeward as a leading renewable energy platform in North America as it plays an important role in the broader energy transition.”

Michael Ryder, Head of Americas, OMERS Infrastructure, said, “We are proud to have Leeward in our global portfolio of high-quality infrastructure assets. Further expanding our investment in clean energy is a priority for us as a key component of our broader commitment to environmentally sustainable investing. Supporting this acquisition and future growth at Leeward is an important part of that strategy.”

Strategic Benefits

• Furthers Leeward’s aggressive market growth strategy across wind, solar and storage technologies: This acquisition accelerates Leeward’s aggressive growth plan, and will make Leeward one of the top renewable energy companies in the U.S. market. Leeward will have streamlined and enhanced capabilities across key functions, such as origination and power marketing, and continue to offer its customers renewable energy solutions across the technology spectrum.

• Accelerates the growth of solar development portfolio: With the transaction, Leeward’s solar development pipeline will reach 14 GW and be located in key markets across the U.S.

• Provides geographic diversity and opportunity to expand into new markets: First Solar’s [pipeline] of development projects, with a strong presence in California, the Southwest, and the Southeast, is an ideal complement to Leeward’s existing portfolio of renewable energy assets, focused on the Midwest, West and Texas markets.

The transaction is expected to close in the first quarter of 2021, following receipt of customary regulatory approvals and satisfaction of customary closing conditions. 

For its part, First Solar put out this press release:

First Solar, Inc. (Nasdaq: FSLR), today announced that it has entered into a Purchase and Sale Agreement (the “Agreement”) with Leeward Renewable Energy Development, LLC (“Leeward”), pursuant to which Leeward will acquire from First Solar a utility-scale solar project platform of approximately 10 gigawatts (GW)_AC. The transaction is expected to close in the first quarter of 2021, after obtaining regulatory approvals and satisfying customary closing conditions.

Headquartered in Dallas, Texas, Leeward is a portfolio company of OMERS Infrastructure, an investment arm of OMERS, one of Canada’s largest defined benefit pension plans. Upon closing of the transaction, Leeward will acquire the US project platform, which includes the Rabbitbrush, Madison, Oak Trail, Horizon, and Ridgely projects that are expected to commence construction in the next two years, as well as the 30 MW_AC Barilla Solar project, which is operational. First Solar will retain 1.1 GW_AC of projects in the US that are expected to be sold separately. Key members of the First Solar project development team are also expected to join Leeward upon closing.

Subject to closing of the acquisition, Leeward will purchase 650 MW_DC of First Solar’s high-performance Series 6 photovoltaic (PV) solar modules for its additional development opportunities. Leeward’s acquisition of the project platform also includes purchase orders for 888 MW_DC of Series 6 modules for the five development projects referenced above. Additionally, Leeward’s acquisition of the project platform will include 242 MW_DC of Series 4 modules safe-harbored under the solar Investment Tax Credit (ITC) program, 148 MW_DC of which has previously been booked. In total, upon closing, Leeward’s acquisition of the project platform will comprise the acquisition of projects with module purchase orders, together with the entry into additional purchase orders, of approximately 1.8 GW_DC of First Solar PV modules, of which 744 MW_DC represent new bookings as of closing.

“This acquisition will support our aggressive growth strategy as a leading independent power producer and elevate Leeward’s prominent position in today’s energy market,” said Jason Allen, chief executive officer, Leeward Renewable Energy. “The public recognizes that renewable energy is a key driver in combating the global issue of climate change. Solar and renewable technologies continue to advance and now provide economically viable solutions in virtually every market in the US. We will continue to grow our wind, solar, and storage presence so we can continue to provide clean energy to our existing and future customers as they pursue their net-zero emission goals.”

“The sale of the platform is a result of the strategic review we announced in 2020 and we’re pleased that it will be acquired by Leeward, a company that shares our values and vision for a sustainable energy future,” said Mark Widmar, chief executive officer, First Solar. “Enabled by our Series 6 module’s seamless compatibility with industry systems and processes, the sale is part of a transition that allows us to focus on doing what we do best, which is scaling, developing, and selling our world-class module technology.”

The completion of the transaction is subject to a number of closing conditions, including the receipt of regulatory approval from the US Federal Energy Regulatory Commission (FERC), the expiration of the waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976, and review by the Committee on Foreign Investment in the United States (CFIUS).

First Solar is the only US-headquartered company among the world’s largest solar manufacturers. With 1.9 GW_DC of annualized manufacturing capacity in Ohio, First Solar is the Western Hemisphere’s largest solar manufacturer. The Company also operates manufacturing facilities in Vietnam and Malaysia, and produced 5.9 GW_DC of Series 6 globally in 2020.

About First Solar, Inc.
First Solar is a leading global provider of comprehensive photovoltaic (PV) solar solutions, which use its advanced module and system technology. The company’s integrated power plant solutions deliver an economically attractive alternative to fossil-fuel electricity generation today. From raw material sourcing through end-of-life module recycling, First Solar’s renewable energy solutions protect and enhance the environment. For more information about First Solar, please visit www.firstsolar.com.

About Leeward Renewable Energy, LLC
Leeward Renewable Energy is a growth-oriented renewable energy company that owns and operates a portfolio of 21 wind farms across nine states totaling approximately 2,000 megawatts of generating capacity. Leeward is actively developing new wind, solar, and energy storage projects in energy markets across the U.S. Leeward is a portfolio company of OMERS Infrastructure, an investment arm of OMERS, one of Canada’s largest defined benefit pension plans with C$109 billion in net assets (as at December 31, 2019). For more information, visit www.leewardenergy.com.

Let me begin by thanking Neil Hrab, Manager Media Relations, Communications and Public Affairs at OMERS for sending me those two last press releases and making me aware of this deal.

Leeward Renewable Energy is a portfolio company of OMERS Infrastructure so by extension, when it enters into a deal of this magnitude, it's good news for OMERS and its members.

What can I share with you? Having invested in solar stocks in the past and present, I can tell you they're melting up in these markets and First Solar (FSLR) is the leading solar company in the world.

The funniest thing I read on the Yahoo Finance message boards on First Solar is this:

"The maker of solar power systems received a double downgrade at Goldman Sachs, which cut its rating on First Solar to “sell” from “buy.” Goldman feels that First Solar’s earnings and margins are peaking and that more cyclical headwinds to its business are emerging."

Really? We are about to embark on a decade+ of decarbonization of the grid and GS characterizes this as "cyclical headwinds"? As others noted, they must have an agenda here. With institutional shares at 98%, they must be trying to free up a few shares.

I just finished writing a comment last night on how Ontario Teachers' is looking to achieve net zero emissions by 2050.

There is no doubt the secular trend on solar and wind remains intact. I'm not recommending to buy solar stocks but many of these companies are run extremely well and that is especially true of First Solar.

Leeward Renewable Energy (Leeward) is a private company and it too is run extremely well. This acquisition, once completed, will allow it grow its operations.

In fact, Leeward's CEO states that's exactly why it entered into this agreement:

“This acquisition will support our aggressive growth strategy as a leading independent power producer and elevate Leeward’s prominent position in today’s energy market,” said Jason Allen, chief executive officer, Leeward Renewable Energy. “The public recognizes that renewable energy is a key driver in combating the global issue of climate change. Solar and renewable technologies continue to advance and now provide economically viable solutions in virtually every market in the US. We will continue to grow our wind, solar, and storage presence so we can continue to provide clean energy to our existing and future customers as they pursue their net-zero emission goals.”

And here is what OMERS has to say about this deal:

Tom Frazier, Managing Director, OMERS Infrastructure, said, “We are delighted to support today’s announcement as a key milestone for Leeward, and look forward to continuing to support Leeward’s growth. This news represents an integral next step for Leeward as a leading renewable energy platform in North America as it plays an important role in the broader energy transition.”

Michael Ryder, Head of Americas, OMERS Infrastructure, said, “We are proud to have Leeward in our global portfolio of high-quality infrastructure assets. Further expanding our investment in clean energy is a priority for us as a key component of our broader commitment to environmentally sustainable investing. Supporting this acquisition and future growth at Leeward is an important part of that strategy.” 

What about First Solar?:

“The sale of the platform is a result of the strategic review we announced in 2020 and we’re pleased that it will be acquired by Leeward, a company that shares our values and vision for a sustainable energy future,” said Mark Widmar, chief executive officer, First Solar. “Enabled by our Series 6 module’s seamless compatibility with industry systems and processes, the sale is part of a transition that allows us to focus on doing what we do best, which is scaling, developing, and selling our world-class module technology.”

There's not much more I can add here, this deal makes perfect sense for all parties even if financial details aren't disclosed.

Let me end, however, on this note.

While I'm happy to see Canada's large pensions investing in solar and wind, I'd prefer to see them team up  with large engineering/ construction companies to build more nuclear power plants.

If we really want to make a difference in terms of climate change, nuclear is the real way forward.

Luckily, OMERS owns Bruce Power, arguably the best portfolio company in its great infrastructure portfolio. I'd like to see others acquire a nuclear power company or band together to build one or many from scratch.

Alright, let me wrap it up there.

Below, what comes to mind when we think about renewables? Wind turbines spinning in a field, solar panels on a rooftop. But there’s much more to a cleaner energy future than these images in our mind. Creating a renewables-based energy future will take a lot of time, resources, and commitment. This episode highlights the benefits and challenges facing a renewable energy system and explores how we can achieve it.

And in a provocative talk, Time Magazine “Hero of the Environment” and energy expert, Michael Shellenberger explains why solar and wind farms require so much land for mining and energy production, and offers an alternative path to saving both the climate and the natural environment. 

Shellenberger is a Time Magazine Hero of the Environment and President of Environmental Progress, a research and policy organization. A lifelong environmentalist, he changed his mind about nuclear energy and has helped save enough nuclear reactors to prevent an increase in carbon emissions equivalent to adding more than 10 million cars to the road. Take the time to watch both clips.