Economy forces consolidation of solar industry
San Francisco's Recurrent Energy announced that it will buy an entire portfolio of development projects from UPC Solar of Chicago. The two privately held companies have not disclosed terms of the deal.
The solar projects - some of them still on the drawing board, some further along - would generate a maximum total of 350 megawatts of electricity if built, equivalent to a small fossil-fuel power plant. They are scattered across the United States and Canada, with many clustered in Ontario.
The deal isn't unique. Just two weeks ago, Hayward's OptiSolar agreed to sell all its development projects to First Solar, a rival based in Arizona. On the same day, a Spanish company announced that it would buy MMA Renewable Ventures, a renewable power developer in San Francisco.
The deals reflect the brutal environment for small alternative energy firms. The financial crisis has cut off their access to capital, leaving many of them unable to build their projects. Companies with stronger balance sheets are seizing the opportunity to go shopping, snapping up worthwhile projects and personnel.
"It's created some Darwinian pressures in the industry that are forcing consolidation," said Arno Harris, Recurrent Energy's chief executive officer. "And companies like Recurrent that are well capitalized have been able to look across the industry and pick up opportunities that aren't as well capitalized. UPC contacted us, and we were impressed with what we saw."
Founded in 2006, Recurrent last year secured $75 million in financing from Hudson Clean Energy Partners.
Recurrent is perhaps best known for its work on a city-led project to blanket San Francisco's Sunset Reservoir with solar panels. The project, expected to go to the Board of Supervisors soon for final approval, would cover an area almost the size of 12 football fields and generate a maximum of 5 megawatts, enough for 3,750 homes.
The company specializes in building large-scale photovoltaic solar installations in and near urban areas, where electricity demand is highest. Although smaller than the huge solar power plants under development in the California desert, Recurrent's projects don't need long-distance transmission lines to bring their electricity to market.
"We're trying to put power generation right where it's needed most, and solar is the one technology that allows us to do that effectively," Harris said.
UPC Solar is part of the UPC Energy Group, which runs renewable power installations worldwide.
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