Published on August 28th, 2014 | by James Ayre8
SolarCity’s Planned 1 GW Solar PV Plant Will Cost Up To $450 Million
August 28th, 2014 by James Ayre
While SolarCity’s recent acquisition of the solar PV panel manufacturer Silevo has certainly opened up a number of interesting options for the company, none of them are likely to be cheap.
According to recent reports, SolarCity’s newly planned 1 GW integrated PV manufacturing plant for Silevo’s technology is expected to cost somewhere between $400–$450 million.
Deutsche Bank analyst Vishal Shah commented on that figure in a recent research note to investors, noting also that SolarCity’s goal of completing the largest solar PV manufacturing plant in the US was still on schedule for 2016. Negotiations with the state of New York are reportedly under way.
The note also mentioned that the company is expecting its own capital expenditure contribution for the project to “only” be in the several hundred million dollars range — which means that the company will likely need to make a secondary public offering of stocks in order to fund it.
Shah also stated that he was expecting SolarCity to continue to see “strong near term bookings momentum” — possibly resulting in the company exceeding its projected 2015 deployed guidance, which currently is set at somewhere between 900 MW and 1,000 MW.
While on the subject, when the deal between SolarCity and Silevo was first announced, we covered the possibilities in great detail. While the news above is of course the most expected action following the acquisition, there are still some other things to consider as well, such as the effect that acquisition will/could have on the “overall solar picture”. The linked article is worth a read in my opinion.
[Update] Here’s an important comment from one of our readers (slightly edited):
The actual note stated a “few” hundred million. A nuance, but reflects a more minimal net capex requirement as opposed to the critical view $1.5 billion of net capex needed.
Also, the “secondary” has a high probability of being mostly as convertible bond offering. The day of the Silevo announcement, Lyndon Rive stated this, so it is absolutely no secret or revelation that they would be doing a convertible offering. It’s only fair you mention this, but seems to be left out for some reason.
SolarCity’s latest ABS was three times oversubscribed, so there potentially could be a strong demand for the convertible bond as well. This is important information since it would arguably indicate SolarCity could raise the required capital at favorable terms minimal short term dilution.
Image Credit: Silevo
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