Revealed: The big money to be made on solar and storage project sales

Here at RenewEconomy we have has lost count on the number of transactions we’ve reported on in the past decade on the buying and selling of undeveloped renewable and storage projects. One question we always asked, but was never answered was: How much did you get paid?

No one ever said. Until now.

The listed Genex Power – now a takeover target – has revealed in a statement to the stock exchange rare details of a big transaction, in this case the newly announced purchase of the 2GW Bulli Creek solar and battery storage project in Queensland.

Genex reveals that the vendor, the Sydney-based Solar Choice, will receive up to $5 million from the transaction itself, $2.5 million when the documents are signed, and another $2.5 million either 12 months later, or earlier if Genex secures a joint development partner.

But then it gets very interesting. Genex reveals that Solar Choice – which has been working on the development since 2013 – will also receive payments for certain “development services”, payable per megawatt and megawatt hour installed.

In the case of battery storage, that will be paid at a rate of $12,500/MWh installed. We already know that  the planned first stage will be sized at 400MW and 1600MWh of battery storage, so if that does get built it will deliver a fee to Solar Choice of $20 million.

The solar component will equate to $32,500/MW (dc) of installed capacity, or $3.2 million for every 100MW.

If the project ends up with 1GW of solar, that will result in a payment to Solar Choice of $32.5 million, and if there is another 1GW of battery capacity, with four hours storage, that could be another $50 million.

Is this typical? We’re not sure. Genex only notes, somewhat quixotically: “The transaction is otherwise subject to typical terms for a transaction of this nature.”

We do know that not all project transactions have such immediate happy outcomes. Another listed company, the Europe-based Photon Energy, reveals a series of equity swaps with Canadian Solar on several Australian projects.

In exchange for its 49 per cent stake in the 220 MWp Gunning solar project and a 25 per cent stake in the 200MWp Suntop 2 solar project, Photon took posession of  Canadian Solar’s stake in the 160MW Maryvale solar project.