SunPower lands solar panel deal as its earnings drop

April 24, 2009 | Camille Ricketts | Comments | |

SunPower has scored a deal to provide 600 megawatts-worth of solar panels and components to the FPL Group, the company that owned utility Florida Power and Light, over the next three years. This could not come at a better time for SunPower, which just announced a net loss of almost $5 million for the first quarter — down from the $12 million net gain reported last year at this time.

Whether this deal will be enough to rectify the dip is unclear. SunPower is already working for FPL on two smaller solar projects that will produce 35 megawatts between them. The two companies also have plans for a 75 megawatt solar thermal plant in the works. Combined, the price tag on these three projects is $728 million. That’s pretty steep, especially considering that the cost of solar materials continues to climb, making solar arrays and plants even more capital-intensive (so much so in fact, that they are scarcely possible without government support in most cases).

Then again, footing a higher bill is suddenly worth it to Florida utilities, who may soon be subject to rigorous new government requirements for renewable energy production. Legislation currently under consideration would make it mandatory for all electric companies to generate at least 20 percent of their power from renewable sources by the year 2020. Although some officials say approval of the bill, called the Renewable Portfolio Standard, will remain stalled until next year.

Under the supply agreement, SunPower will deliver 100 megawatts worth of equipment every year for three years. After that, FPL will have the option to purchase more. Still, SunPower is confident enough in the deal to establish a solar research center in the state with up to 50 employees, reports the Wall Street Journal. No financial terms of the deal have been released.

For now, SunPower simply needs to stay afloat through the downturn. Most analysts agree that the outlook for solar is bright after the next two years, considering the extensive government support and development of more efficient and useful technology. In the meantime, the San Jose, Calif. company has lowered its sights, adjusting its projected earnings for 2009 from $1.6 to $2 billion to $1.3 to $1.7 billion.

Next Story: Joost: For sale, or just fortifying?
Previous Story: Triond finds way for B-list bloggers to make money

Bookmark and Share

Tags:

Photo of Camille Ricketts

About the Author, Camille Ricketts

Camille is the lead writer for GreenBeat. She came to VentureBeat from Google where she worked on its traditional platforms team, particularly in TV. Before that, she was a reporter for the Wall Street Journal in New York and London. Follow her on Twitter at @camillericketts, and follow VentureBeat on Twitter at @venturebeat.

With GreenBeat 2009, VentureBeat's all-star conference on all things Smart Grid, coming up in November, Camille will be expanding coverage of this exciting space. Stay up to date by following @greenbeat2009 on Twitter or by becoming a fan of the event on Facebook here.

  • disdaniel
    "considering that the cost of solar materials continues to climb"

    Huh? Perhaps you need to explain this. It is my impression that the cost of solar PV is falling right now. Also because of the downturn the cost of all metals, glass, etc is less than it was a year ago. Now credit is harder to come by that is true...
  • WA
    solar PV might be dropping, but the medium outlook of cleantech should be positive given the VC influx cycle and obama's policy:

    http://www.wealthalchemist.com/Blog/2009/04/cle...

    Let' see if they can survive this downturn. The industry needs to go through transformation in consolidation and efficiency btw
  • Lauren Engineers & Constructors is building FPL's 75 megawatt solar thermal plant.

    As an earlier Comment noted, solar material input costs and solar module price per Watt are declining in this period of soft demand during the economic crisis. Large PV project financing is challenging during the credit crunch.