The 1.2GW of solar projects rendered worthless by Australia policy

One of the big news events of the last week in the solar industry was the $US265 million purchase of US-based solar project developer Recurrent Energy by Canadian Solar, one of the top four solar manufacturers in the world.

The purchase includes a portfolio of around 4GW of solar projects that Recurrent Energy has built up in the US and Australia. Around 1.25GW of these are in Australia, and Canadian Solar has picked up the Australia portfolio for nothing – probably because of the huge uncertainty around the renewable energy target in Australia.

Last year, RenewEconomy reported on the fact that Recurrent was closing its office in Australia due to the poor policy environment, although the company would still look for opportunities to develop its portfolio with regular visits to the country.

But the purchase price reflects only the value of the “near-term” pipeline, just over 1,000MW of projects in California and Texas that will get built before the anticipated expiration of the investment tax credit.

“The purchase price reflects the value of the near-term pipeline only,” a spokesman said. “The long-term pipeline is a free option.” In other words, it is for free.

Recurrent is not the only energy portfolio in Australia to be sold. Investec recently exited its Australian energy project pipeline, selling the Hornsdale wind project in South Australia, and a handful of solar projects in Western Australia, to France’s Neoen and Megawatt Capital, set up by former Investec executives.

Hornsdale was one of the winners of the ACT governments reverse auction for 200MW of wind capacity, and will start building the first 100MW stage of the project later this year.