Time New York: Wed 28 Sep 19:57 pm  |  Save 15% on H&R Block Online

  
caticonslite_bm_alt

8point3 (CAFD) to Buy 49% Stake in SunPower’s Solar Project

Zacks

8point3 Energy Partners CAFD announced that it has entered into an agreement to acquire a 49% interest in SunPower Corp.'s SPWR 102-megawatt (MW) Henrietta solar project for $134 million. Meanwhile, Southern Company SO will continue to hold its 51% stake in the project.

8point3 Energy is a partnership formed by First Solar, Inc. FSLR and SunPower to own, operate and acquire solar energy generation projects. The sponsors of 8point3 Energy intermittingly drop down assets to the partnership. In Apr 2016, the companies dropped down 90 MW of solar projects to the partnership.

Benefits of the Transaction

The acquisition is expected to generate nearly $10.9 million in annual cash distributions throughout its 20-year contract life. It will enable 8point3 Energy to hold an interest in 637 MW of solar projects.

The acquisition is expected to close in Sep 30, 2016, subject to financing and other customary closing conditions. 8point3 Energy will finance the stake purchase through a combination of cash on hand, borrowings under its existing credit facility and the issuance of additional equity.

8POINT3 ENERGY Price

8POINT3 ENERGY Price | 8POINT3 ENERGY Quote


Scope of Alternate Energy

Regulations pertaining to pollution control are becoming increasingly stringent, making it crucial for utilities to spend more on emission control infrastructure. Meanwhile, because of their clean-burning nature, investment in the alternate energy space could prove to be profitable. In particular, solar energy, which presently contributes to only 1% of the total electricity generation in the U.S., represents ample scope of improvement in the days to come.

Earnings Update

The partnership reported third-quarter fiscal 2016 earnings of 38 cents, missing the Zacks Consensus Estimate of 42 cents by 9.5%. In the fiscal fourth quarter, revenues are projected to be in the range of $13.5 million to $14.5 million, while for the full year, revenues are anticipated in the $60.2–$61.3 million band.

Zacks Rank

8point3 Energy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.

Zacks Investment Research
<-- You can share this post with your network,
or give us your opinion and leave a comment.
Be sure to check our RSS feeds for updates.