NEW YORK (
$305 million acquisition of private solar power project developer
may not seem, on the surface, to have direct implications for pure-play solar stocks, but some prominent solar stocks will be losers as a result of Sharp's big play to ramp up its North American project development t plate.
Sharp announced on Tuesday that it was acquiring California-based Recurrent Energy and its 2 gigawatt pipeline of projects. The logical conclusion is that like all the other solar module purchasers of project pipelines, from
( SPWRA) and
MEMC Electronic Materials
, Sharp is developing a captive channel for its own module sales.
In this event, current solar module sales partners of Recurrent Energy may be left out in the cold as the projects develop and a majority of the projects use Sharp solar modules. Among prominent solar stocks that have been used by Recurrent are First Solar and
Yingli Green Energy
signed a three-year sales agreement with Recurrent in 2009. A few months back Suntech Power had been rumored as a potential acquirer of Recurrent, among other companies.
Sharp may also be a larger competitive threat to the U.S. thin film market, where First Solar is dominant, but many private solar companies are trying to chip away at First Solar's lead also. Sharp was the supplier of 5 megawatt thin film modules for the recently completed CalRENEW-1 project in Mendota, CA. More generally, Sharp has been making inroads in the California market.
At a larger level, the deal took many by surprise as all the major project pipeline purchases until now have been made by the U.S. solar companies, First Solar, SunPower and MEMC. The Chinese module makers have been reluctant to pursue this strategy, and for the most part have been happy to sell their modules as opposed to pursuing the captive module channel through pipeline acquisition strategy. So it's the first major solar project deal pulled off by an Asian competitor, and the pipeline is focused on U.S. soil.
--Written by Eric Rosenbaum in New York.
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