High-efficiency PV module producer and project developer SunPower said it was reducing its focus in PV power plant development outside the US and focus more resources to the distributed generation market in the US.
The demand for high-performance modules was said to remain strong and so the company would add 100MW of new X-Series module capacity. However, job losses were put at around 1,200, primarily from the closure of its module assembly plant in the Philippines and moving production tools to its Mexican facility.
SunPower said that the extension of the Investment Tax Credit (ITC) had reduced the urgency to complete new projects by the end of 2016, while many clients had pushed projects out. Another reason could be that module prices are falling, due to overcapacity and with the ITC deadline gone, clients could hold out for better pricing.
SunPower also noted that the realignment of its Power Plant segment was due to continued market disruption in the yieldco environment, which the company said had “impacted our assumptions related to monetizing deferred profits.”
The company also noted that “near-term economic returns had deteriorated due to aggressive PPA pricing by new market entrants, including a number of large, global independent power companies. We are also seeing customer project IRRs rising in the near term as buyers have increased their hurdle rates due to industry conditions.”
Around 200 jobs would be lost from the refocus coming from downstream Power Plant segment and corporate level.
Tom Werner, SunPower president and CEO said, "As a result, we have proactively decided to streamline our power plant development segment while shifting investment to our distributed generation (DG) segments. We intend to focus our development resources on a limited number of core markets, primarily in the Americas, where we believe we have a sustainable competitive advantage and a project pipeline of over 9 gigawatts (GW). Outside these core markets, we will focus our power plant business on the sale of our new Oasis complete solution incorporating Performance Series panel technology to developers and Engineering, Procurement and Construction companies in global markets, including Total. We also plan to delay the timing of certain projects in our 2016 and 2017 pipeline to take advantage of planned cost reduction efforts over the next two years. We expect these actions to significantly lower operating expense and capital deployment in our power plant business while maintaining leadership in our core markets. ”
