8point3 Energy Partners LP, a limited partnership formed by First Solar and SunPower as a YieldCo company, has priced an initial public offering (IPO) of 20,000,000 Class A shares. The IPO price was initially set at a price of US$21.00 per share.
To own and operate solar energy generating portfolios, First Solar and SunPower agreed on establishing the YieldCo company, 8point3 Energy Partners. 8point3 Energy Partners is listed on the NASDAQ Global Select Market under the symbol “CAFD” and began trading on June 19, 2015. Although the price declined 2.43% down to US$20.49 per share on June 21, it seems to climb slowly on June 22.
Underwriters of 8point3 Energy Partners have a 30-day option to purchase up to an additional 3,000,000 shares from 8point3 Energy Partners at the IPO price, less the underwriting discount. The company intends to use all of the net proceeds of the IPO to purchase the common units of 8point3 Operating Company, LLC, the entity that holds 8point3 Energy Partners' project assets. 8point3 Operating Company intends to use the proceeds from the sale of its common units (i) to make a cash distribution to each of First Solar and SunPower and (ii) for general corporate purposes, including to fund future acquisition opportunities.
Goldman, Sachs & Co. and Citigroup Global Markets Inc. are acting as lead book running managers for the IPO. Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and Credit Agricole Securities (USA) Inc. are acting as joint book-running managers for the IPO.
Future
YieldCo will be, and is a famous business model for renewable energy, especially for solar power. YieldCo takes power generating facilities as operating assets that will earn money over a certain period, like 20 years, creating stable cash flow for the asset owners and “shareholders.”
Both First Solar and SunPower look forward to the new YieldCo company. Lower costs of solar generating assets will further prompt the installations and therefore create more profit in the future.
Jim Hughes, CEO of First Solar, said, “We will be under US$1 per watt by 2017,” reported benzinga. At the end of 2014, utility-scale solar power costs ranged from US$2.1 to $1.4 per watt, while the average prices keep falling year by year at a ratio of approximately 12%. Many manufacturers are devoting to produce solar products with higher efficiency and lower costs for being more competitive in the global market.