Renewable energy industry undaunted by SunEdison’s collapse
The world’s biggest developer of clean-energy projects, SunEdison, is now in bankruptcy in the United States after it has racked up US$16.1 billion in liabilities. Investors and industry partners were spooked with the US$3.1 billion that the company has splashed out in its expansion spree into the wind and solar sectors.
The company’s problems started when they went on an acquisition binge where it bought up wind and solar projects on every continent except Antarctica. The market initially responded positively, driving the shares to a peak of US$32. But in July, when it announced their plants to buy Vivint Solar Inc. at a 52 percent premium, doubts started to creep in. Vivint scrapped the deal in March after delays and renegotiations, and they are now suing SunEdison. The U.S. Department of Justice and U.S. Securities and Exchange Commission also started inquiries into SunEdison.
But rival renewable energy companies remain unperturbed by the SunEdison’s collapse, saying that the largest US bankruptcy this year will not harm the industry.
According to Jenny Chase, chief solar analyst for Bloomberg New Energy Finance, the bankruptcy says more about SunEdison’s “relentless pursuit of growth” than the solar industry as a whole. In the US and Europe, the wind and solar energy sectors remain strong in terms of the interest and investments they are getting. Chase also noted that other large developers like First Solar Inc. have been profitable in the recent years, and that SunEdison’s restructuring may even benefit other solar developers.
The bankruptcy of this “former solar star” shouldn’t give the impression that the solar industry “can be lumped in with the incumbent energy industries,” said Jeremy Leggett, founder of Solar Century Holdings and author of four of books on climate change and energy.
According to data compiled by Bloomberg New Energy Finance, investment in the industry hit a record $329 billion last year which is more than triple the investment of a decade ago. Governments everywhere are stimulating renewables and ratcheting back support for fossil fuels after agreeing in Paris in December to limit the emissions causing global warming. That deal will be signed by more than 160 nations in New York on Friday.
According to Dan Whitten, a spokesperson for the Solar Energy Industries Association, SunEdison’s struggles will mainly affect the company, rather than the whole clean-energy market. “Not every company in the solar market is going to stand the test of time,” he said in a statement Thursday. “SunEdison is just one company and today’s development does not reflect a trend of the broader industry.”
Source: Bloomberg