SunEdison turmoil imperils solar projects worldwide

In November, solar energy giant SunEdison reported that its project pipeline had grown by 75 per cent in just a year, the result of an aggressive growth strategy.

Now, five months later, many of those projects are imperiled as SunEdison reportedly prepares to declare bankruptcy.

Read more from our special coverage on "SUNEDISON"

• Why SunEdisons exit wont hurt Indias solar sector
• Brian Eckhouse: How a solar firm spent itself to the brink
• SunEdison at risk of bankruptcy; shares fall 60%
• Shadow over SunEdison Indias solar projects

SunEdison’s rapid growth in planned capacity — from 4.5 gigawatts to 7.9 GW in 12 months, according to a company press release — was propelled by an acquisition spree and aggressive underbidding of rivals on projects. Put in perspective, a typical nuclear power plant has a capacity of 1 GW.

Among the deals now in question is a solar plant under construction for the central Texas community of Georgetown.

SunEdison initially told officials there it would self-finance the project, but now wants to make alternative funding arrangements.

At SunEdison’s request, the city last month authorised financing through Morgan Stanley, but the financial services firm has yet to agree to the arrangement.

In February, Hawaiian Electric Company cited project delays in cancelling a contract with SunEdison to purchase power from three solar facilities the company was building on the island of Oahu.

And last month, TerraForm Global — a related company set up to own and operate clean energy assets developed overseas by SunEdison — warned of delays in construction on two projects in Uruguay and a wind venture in India. Another of SunEdison’s Indian ventures, a 500 megawatt solar plant that is one of the country’s biggest forays into renewable energy, has not yet broken ground. Industry sources said it will likely be re-bid unless another company steps in to buy it.

SunEdison declined to comment on the number and status of its unfinished deals. Company releases and news reports suggest the company has dozens of projects in development, ranging from massive power plants to small rooftop arrays.

The company has already sold off some large ventures, including its portion of the massive Beacon Solar project going up in California’s Mojave desert, which Swiss investment firm Capital Dynamics bought last month.

SunEdison and First Reserve — which jointly own the huge 156 MW Comanche Solar plant underway in Colorado — asked the Federal Energy Regulatory Commission in March for expedited approval to sell that project. The FERC filing said the parties had identified three potential buyers.

First Reserve, which financed the plant but never intended to be a long-term owner, declined to comment.

SunEdison was until recently the nation’s fastest growing renewable energy developer, but the company now faces a cash crunch and $12 billion in debt, according to regulatory filings. Its shares have fallen about 98 per cent over the past 12 months.