Updates
March 19, 2016:
from a blurb on SunEdison --
Development of the solar farm will be led by SunEdison -- whose
parent company appears to be in deep doo-doo; filed just 18 hours ago, Zacks is reporting that SunEdison postpones 10-K filing again; YieldCo in trouble; this delay also put SunEdison’s yieldco TerraForm Power TERP in trouble.
TerraForm Power is unable to file the 10-K as it has to rely on
SunEdison systems and personnel to complete its financial reporting and
control processes.
The high debt burden is mainly due to SunEdison’s aggressive acquisition
policy which took a toll on the balance sheet with total outstanding
debt nearly doubling to $11.7 billion at the
end of third-quarter 2015 from $6.3 billion a year ago. On the news, SunEdison's shares fell again Tuesday (this week). Up to Tuesday's close, SunEdison's shares had fallen more than 90
percent in the past 12 months while TerraForm's had dropped about 70
percent.
Original Post
I have a page called the "
next big thing."
I think this next subject could be placed on that page. "Yield cos."
"Yield cos" have been around for awhile; I may have first noted them six months ago, but in the big scheme of things, these are quite new (if not new "new," at leas the "new" buzz). Let's see if wiki has a page on them yet. Google yieldco wiki. Yup, there it is:
yield co.
Yield cos are commonly used in the energy industry, particularly in renewable energy to protect investors against regulatory changes. They serve the same purpose as master limited partnerships (MLPs) and real estate investment trusts (REITs), which most utilities can't form due to regulatory constraints. Yield cos give investors a chance to participate in renewable energy without many of the risks associated with it.
I find yieldcos or yield cos interesting for two reasons. First, I am fascinated by all the interest in solar energy, simply from an academic point of view; and, second, yield cos provide an interesting opportunity for investors.
Disclaimer: did I just mention "investors"? OMG. This is not an investment site. Do not make any investment or financial decisions based on anything you read (past, present, future tense) here or think you may have read here.
According to wiki, the number of yield cos grew rapidly in 2013 and 2014 through initial public offerings. They include:
- NextEra Energy Partners
- NRG Yield
- Brookfield Renewable Energy Partners
- TransAlta Renewables
- Pattern Energy Group
- Abengoa Yield PLC
- Hannon Armstrong Sustainable Infrastructure
- TerraForm Power
I'm not going to say much more about it; just posting enough to help me understand the phenomenon.
From 24/7 Wall Street:
Why First Solar YieldCo Will Dominate.
Both First Solar Inc. and SunPower Corp. recently reported first-quarter results that fell far short of
estimates. Analysts may not have taken fully into account the amount of
revenues that both companies have received in the past from sales of
their completed projects.
This time was different. This time, both First Solar and SunPower
held on to assets they might have sold before because those assets are
destined for the two companies’ joint venture yieldco, 8point3 Energy
Partners.
Analysts at Argus have now weighed in on First Solar following its
first-quarter report and have also provided a look at the prospects for
the yieldco. The short version is that Argus rates First Solar a Buy
with a price target of $78 a share.
ccording to Argus, First Solar is the best positioned of all solar
makers based on three factors. First, the company has managed to remain
profitable while many of its competitors have not. Second, First Solar
continues to invest in its technology; witness the recent acquisition of
an intellectual property portfolio from General Electric. Third, the
company has a solid balance sheet and is cash-flow positive. The yieldco
offers “additional opportunities for the company to monetize projects.”
Solar companies are diversifying in other ways also.
Forbes is reporting:
SunEdison is moving beyond solar. Beyond even the wind market that it
just entered recently. It now plans to be a hydropower plant owner,
too.
The Missouri company on Thursday said it’s agreed to buy 757 megawatts of renewable energy
projects from seven companies that include hydropower plants in Brazil
and Peru. SunEdison plans to pay $1.4 billion for five of the seven
pending acquisitions, according to its filing with the U.S. Securities and Exchange Commission.
The types and locations of the projects reflect the company’s focus
on gaining a foothold in emerging markets and owning a greater variety
of renewable energy projects.
SunEdison is building a solar panel
factory in India and recently hired Cathy Zoi,
a former partner at private equity firm, Silver Lake Kratwerk, and
assistant secretary at the U.S. Department of Energy, to head its rural electrification effort.
Of course, SunEdison isn’t the only solar project developer to have been a globetrotter. When growth in Europe seemed to slow down in 2011, First Solar started to talk more about efforts to move into emerging markets such as India and China. The same goes for SunPower which is bullish about the Middle East and recently teamed up with Apple to build solar power projects in China.
Much, much more at the link.
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People Need To Walk More Miles To Their Nearest Fast Food Restaurants
This is the lead story in
The Los Angeles Times today and is being reported everywhere. Here is
the CBSLocal report: curbing fast-food restaurants did not lower obesity rates; in fact, obesity rates are up seven (7) years after curbing fast-food restaurants in southern California.
A much-hailed law that restricted the opening of new stand-alone
fast-food restaurants in one of the poorest sections of Los Angeles did
not curb obesity or improve diets, a new study found.
City lawmakers passed the zoning ordinance in 2008 that limited the
opening or expansion of fast-food outlets in a 32-square-mile area south
of Interstate 10 that struggles with high obesity rates and other
health problems.
The law, believed to be the first effort of its kind by a major city
to improve public health, did not ban new eateries in strip malls.
The research by the Rand Corp. think tank found that obesity rates in
South Los Angeles continued to rise after passage of the law.
“It had no meaningful effect,” Rand senior economist Roland Sturm
said. “There’s no evidence that diets have improved more in South LA.
Obesity and overweight rates have not fallen.”
Health experts said a single intervention would not reverse the
obesity problem. People also have to exercise and make lifestyle
changes, they said.
I would assume that making folks walk farther to their favorite fast-food restaurant was the "exercise and lifestyle change" the city lawmakers were hoping would make a difference.
If this news report doesn't end up on the Rush Limbaugh radio show sometime next week, I would be terribly -- terribly -- surprised.
