Maryland-based SunEdison LLC has, without detailed explanation, raised $161 million dollars in equity and debt funding by finding new investors and pressing current ones to increase their stake in the solar installation and financing services firm.  The only comment by the corporation on the matter was that the additional funding would be used to finance continuing operations, a carefully crafted phrase that can imply anything from impending financial doom to the nearing dawn of a massive project that one would imagine would take 161 million dollars.

In the past SunEdison has been aggressive in their business strategy, but nothing like this— in 2006, they raised 26.1 million dollars from two venture capital groups, Goldman Sachs Group and Mission Point Capital Parters, and have been recently signing a series of agreements with utilities like Duke Energy North Carolina and Constellation Energy Commodities.  Duke’s contract was for the largest solar array in the nation, a 16 megawatt project in Davidson County North Carolina.  Constellation, meanwhile, is spreading 4 megawatts of solar projects across Maryland in SunEdison’s own backyard.

What’s The Competition Doing?

Within the context of their industry, it looks like SunEdison is gearing up for a green arms race.  At the end of last year, San Francisco-based Recurrent Energy successfully raised $200 million from Morgan Stanley to do develop projects and build partnerships in the exact same fashion that SunEdsion has been on the east coast, and Renewable Ventures LLC, which is wholly owned by Municipal Mortgage Equity LLC, is developing 34 Megawatts of power at 18 different sites, including the largest single array in the nation at Nellis Air Force Base.  Taken within this context, it’s easy to see why SunEdison feels such an astronomical amount of money must be raised, and why they’re exploring overseas partnerships, as well, which the other two firms are not.

Why All The Private Money?

Why do the solar companies need to go to all of that effort to raise the money?  When new fossil fuel plants are built, they’re frequently the subjects of substantial public financing, and a state or federal bond issue—even at costs in the hundreds of millions of dollars, and even though the utilities are keeping the profits.  As you might have guessed, the solar industry has yet to develop the sort of lobbying capacity that coal, and the other fossil fuels, have, giving it a distinct disadvantage when it comes to seeking public assistance, and only recently has some cutting-edge technology put solar and coal on a cost/kilowatt hour level playing field, an essential consideration if you live in a state that’s both broke and beholden to coal (Kentucky, West Virginia).  SunEdison’s ability to seemingly overcome this issue without needing public financing can only be interpreted as good news.

More Reading:

Solar Energy Provider SunEdison Raises $161 Million (CNN Money)
SunEdison + Duke = Largest Solar PV Farm in U.S. (Earth2Tech)

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