Sharp Corp. said on Tuesday it will pay $305 million for San Francisco-based Recurrent Energy Inc., which develops solar projects.
Osaka-based Sharp makes solar panels and other electronics. Sharp was the world’s third-largest producer of solar panels in 2009, according to Photon International. The firm employs 65,000 people.
Buying Recurrent’s pipeline means Sharp will move into project development just like its solar panel competitors San Jose-based SunPower Corp. and San Francisco-based Suntech, among others.
Among Silicon Valley projects Recurrent has been involved in include systems installed at 15 Kaiser Permanente facilities, including its Santa Clara medical center.
Recurrent CEO Arno Harris said Recurrent will continue to operate under its own name as a subsidiary of Sharp and that all of Recurrent's employees will remain with the company.
Harris said the company needed to seek a partner with a deep balance sheet that could provide the capital to develop such a huge project pipeline. Recurrent sought the advice of Morgan Stanley.
"We decided a strategic sales made the most sense," Harris said.
Recurrent has 1.3 gigawatts of solar projects in its pipeline with only a few megawatts actually installed and producing power. Large solar projects can take years to plan, develop and get to bid and acquiring Recurrent’s pipeline is a good way for Sharp to get a jump on the development business.
Harris started the company in 2006 and landed its first highly visible project, 5 megawatts on San Francisco’s Sunset Reservoir and on the roof of Pier 96 in 2008. That project took several years to get final approvals and is nearly finished.
Meanwhile, Harris and Recurrent amassed tons of other projects, including buying a pipeline of up to 350 megawatts that the company purchased from UPC Solar. Recently it landed winning bids to develop 60 megawatts of solar for the Sacramento Municipal Utility District.
The company found its niche in commercial projects averaging 2 to 20 megawatt near power lines. The strategy means Recurrent can build projects in about 18 months to 2 years, shorter than many large scale projects that have to site transmission lines and may be delayed by inadequate panel supply.
Recurrent has a suppply agreement with Yingli Solar and Harris said that agreement would not be affected by the acquisition.
"We're not obligated to purchase Sharp products for our projects," said Harris.
Read more: Sharp buys Recurrent for $305 million - Silicon Valley / San Jose Business Journal
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