First Solar commits to Ontario OptiSolar projects
First Solar’s purchase of OptiSolar’s project pipeline for $400 million in stock is a shrewd move during these uncertain economic times. To have more than 2,000 megawatts of solar projects in the pipeline — confirmed or under advanced negotiations — is a coup for the company. Land rights that offer the potential for 19 gigawatts is icing on the cake.
A lot of attention has focused on OptiSolar’s 550 megawatt PG&E project being transferred to First Solar. What hasn’t been discussed in all the media coverage, however, is what this means for the 200 megawatts or so of OptiSolar projects being developed in Ontario, specifically around Sarnia.
The Ontario projects are the first ones announced by OptiSolar and are the most advanced. Already shovels have hit the ground and a couple of megawatts have been installed and are connected to the grid. A spokesman for the Ontario Power Authority told me that the procurement contracts can easily be transferred from OptiSolar to First Solar. “The status of the contract doesn’t change. The developer really just has to give us written notice of the change,” said Jim MacDougall, manager of the agency’s distributed generation program.
A spokesperson from First Solar, who didn’t want to be named or quote, said the company is committed to all projects but didn’t have much detail because the deal is not yet closed. First Solar has said it will develop the projects and, in some cases, sell them later to an independent power producer or utility.
The value of the Ontario contracts alone is not insignificant. Based on Ontario’s solar profile, I calculated that 200 megawatts pays out $84 million (Canadian) annually. Over the 2o-year term of the contract, that’s $1.68 billion.
Will be interesting to see how things change when First Solar picks up the reins.
Tags: First Solar, ontario, Optisolar, Sarnia
Tyler Hamilton is associate publisher and editor-in-chief of Corporate Knights magazine and former business columnist for the Toronto Star. This blog is a personal project started in April 2005.
March 9th, 2009 at 3:28 pm
this is an interesting turn of events. Now these contracts, is the Ontario or Federal government providing subsidies for development in Sarnia, and if so, will we be subsidizing an American company ?
April 24th, 2009 at 1:25 pm
The OPA will be paying for the power at a rate that is subsidizing the huge capital cost of building solar. Yes the govt will be paying an american company, but in the end gain sustainable green grid power. If there’s a Canadian company out there with the smarts to build thin film solar, and arrange the financing to build out 200 MW of power, then by all means build away, there is no cap or shortage of land in Sarnia to carpet with panels. The rate per KWh that OptiSolar arranged is the same ammount that any individual who puts panels on his roof can get.
Good luck First Solar!