Cash-strapped UPC Solar sells assets to Recurrent Energy

19 March 2009

Solar power company Recurrent Energy said on Wednesday it had bought the rights to develop up to 350 mw of solar power projects from cash-strapped UPC Solar in the United States and Canada. Financial terms of the deal were not released, although most of the payments will be made as projects are developed.

"The key thing for us was that the deal was done in a way so that there was not a lot of cash upfront," Recurrent Energy chief executive officer Arno Harris told Clean Technology Insight in an interview. Harris said Recurrent will pay a small amount for the project pipeline and allow employees of UPC Solar, a unit of UPC Energy Group, to share in the development fees that come from successfully completed projects.

Recurrent, a privately held company that focuses on smaller utility-scale projects of between 2 and 20 mw, will finance and develop the UPC projects, and is targeting more than 100 MW of operational assets by 2012.

The privately held UPC Energy Group has over 750 mw of renewable energy assets in operation and and 3,000 mw in development globally. However, lack of available project financing has forced the photovoltaic project developer to pull up its stakes.

The deal for Chicago-based UPC Solar's assets is the latest development in what Harris predicts could become a frenzy of consolidation as solar developers get gobbled up due to a paucity of development funds.

Although not as large as the Arizona-based First Solar Inc's $400 million acquisition of the 1.3 gigawatt Optisolar development pipeline, Recurrent has managed to more than double its pipeline, with up to 350 mw of potential new projects coming from UPC Solar.