Acquisitions Intensify In Red Hot Solar Industry As Companies Foresee Growth In 2020 And Beyond
Seeing sharply higher growth in solar installations in 2020 and beyond, companies such as California-based Solar Integrated Roofing Corp. (OTC PINK: SIRC) and SinglePoint (OTCQB: SING ) have grown in solar by takeover. Others, such as SunPower Corp. (NASDAQ: SPWR) and FirstSolar Inc. (NASDAQ: FSLR) are jockeying for market position in solar by re-strategizing growth plans.
In solar acquisition news, Solar Integrated Roofing Corp. (OTC PINK: SIRC) has finalized terms and an acquisition agreement with Milholland Solar Electric and Roofing, a solar company based in San Diego, California. Milholland is a certified Tesla Powerwall solar installer. Tesla, Inc.’s (NASDAQ: TSLA) CEO Elon Musk has made a priority to employees of growing solar product sales. SinglePoint (OTCQB:SING) earlier this year acquired Direct Solar and sharply improved its financials by doing so.
Two major solar companies — SunPower Corp. (NASDAQ: SPWR) and FirstSolar Inc. (NASDAQ: FSLR) — made strategic decisions to re-focus their solar efforts. SunPower Corp has closed its solar panel manufacturing plant to instead focus on the installation of solar rooftop systems. SPWR (NASDAQ: SPWR) is closing the facility and spinning it off to a new company, Maxeon Solar. FirstSolar Inc. (NASDAQ: FSLR), in contrast, stopped building solar farms and in turn is now focusing on solar manufacturing.
Available financing for solar installations helped drive the growth of solar in 2020. SinglePoint (OTCQB:SING) reports that its Direct Solar Capital financing arm has been a key part of its successful closings of solar installations to residential and commercial clients. It makes it easier for potential customers to put down less money for immediate solar installations.
Tickers: Solar Integrated Roofing Corp. (OTC PINK: SIRC), SinglePoint (OTCQB: SING), Canadian Solar Inc. (NASDAQ:CSIQ), SolarEdge Technologies (NASDAQ: SEDG), First Solar (NASDAQ: FSLR), Tesla, Inc. (NASDAQ: TSLA) and SunPowerCorp. (NASDAQ: SPWR).
New York, NY, December 9, 2019 — Stock Market Press is a leading financial news company that delivers up to date news. News on the wires today includes how solar companies are intensifying their efforts to gain footprints in the hot solar industry through acquisitions and focusing on new strategies including manufacturing and installations.
In other news we also talk about SunPowerCrop. (NASDAQ: SPWR), SinglePoint (OTCQB: SING), Canadian Solar Inc. (NASDAQ: CSIQ), SolarEdge Technologies, Inc. (NASDAQ: SEDG), First Solar (NASDAQ: FLSR) and Tesla, Inc. (NASDAQ: TSLA).
Takeovers are a key growth strategy in the hot solar industry. A series of acquisitions continues for California solar installer Solar Integrated Roofing Corp.(OTC PINK: SIRC). SIRC recently finalized terms and an acquisition agreement with Milholland Solar Electric and Roofing, a San Diego, California-based solar installation company. Dave Massey, CEO and founder of SIRC, said Milholland is expected to generate some $10 million in revenues for 2019. He noted that in 2016, Milholland was on the INC 5000 list (No. 998) as one of the fastest-growing private companies in America.
Prior to the finalization of the Milholland acquisition agreement, Massey projected SIRC’s (OTC PINK: SIRC) annualized sales at $40 million in the February fiscal 2021. In October 2019, SIRC reported sales of $1.7 million and $4.9 sales in FY 2019. SIRC had expected before the latest takeover to triple company sales in 2020. SIRC has set its annual shareholder meeting for tomorrow, December 10th, at its headquarters in Poway, California. Milhollland is a certified installer of Tesla’s (NASDAQ: TSLA) Tesla rooftop Powerwall solar products. Massey called Milholland, founded in 1990, as “one of the most respected and lauded solar/roofing companies in Southern California.”
Milholland would be the most recent of SIRC’s (OTC PINK: SIRC) series of solar company takeovers this year. Prior it acquired: Secure Roofing and Solar, which has $5 million in trailing annual revenues; McKay Roofing, which has $5 million in trailing annual revenues; Montross, which has trailing annual sales of $2.5 million; and Narrate, Inc., a marketing firm which has a targeted goal of $3 million monthly by summer 2020, it said.
Massey said the Milholland acquisition agreement is part of his company’s growth plan. “We continue to execute on our business plan by finalizing our terms for acquiring Milholland, capping an incredible period of growth for SIRC in 2019,” Massey said.
Solar is seen as having a strong future in California, where new state laws go into effect in January requiring solar systems installations on new residences. Long term, solar will save homeowners money and also provide manufacturers and installers a larger revenue stream. The industry estimates that in 2020 some 74,154 new homes will be built in California. If the same number of homes are built in the next three years, the state estimates solar usage will increase by 14%.
Stimulating solar in California is a report by the U.S. Department of Energy that California solar users can save $31,307 over a 20 year period. And because starting in 2020 California residents will begin paying for electricity based on time of day, solar powered battery storage can further enable California residents to save by storing power in batteries and avoid paying peak period prime rates. Also incentivizing homeowners will be other energy efficient upgrade options which can reduce energy usage in new homes by up to 50%, California officials believe.
Benefitting from significant sales gains from an acquisition in the solar industry is SinglePoint (OTCQB: SING ). SinglePoint acknowledged the importance of its acquired Direct Solar for its sharp jump in revenue for Q3 2019. The company reported $1,050,374 in sales for the three months ended September 30, 2019, a 176% rise from the $381,037 in 2018. SING management said Direct Solar continues to exceed its targets and has been pivotal in its improved performance. Its new arm, Direct Solar Capital, enables the company to close quickly on residential and commercial solar installations, management said. The financing of solar projects by Direct Solar Capital reduces the need for high short term expenditures by installation clients, management said.
Tesla, Inc.’s (NASDAQ: TSLA) CEO Elon Musk was quoted by site Business Insider as writing in an email to employees that installing more solar products and delivering Tesla cars to customers were his top two priorities by the end of this year. The email quotes Musk as saying, “The first is making sure all cars are delivered to their customers before the end of year. The second, just as important, is that we immediately increase the rate of solar deployments by a significant degree.” The email was first released by site Electrek.
Tesla’s solar products include traditional solar panels and roof tiles with solar cells inside, BI said. It added that Tesla’s sales of solar products grew during the company’s third quarter this year. In an effort to lower costs on solar, Tesla reportedly debuted a standardized online ordering system for solar panels this year, the site said. Tesla’s Solar Roof project is projected to reach installations of 1,000 roofs per week by the end of Q3 2020, it said. It will likely take Tesla to the end of Q2 2022 to reach its goal of 5,410 solar panels a week. In after market trading, Tesla, Inc. common stock (NASDAQ: TSLA) reached $335.89.35 this weekend, rising 1.67%
Several industry companies are already jockeying for marketing position in the growing solar industry. As solar’s importance grows, companies such as SunPowerCorp. (NASDAQ: SPWR) and First Solar (NASDAQ: FSLR) are refocusing their activities in the solar market between manufacturing and installing.
SunPowerCorp. (NASDAQ: SPWR) has closed its solar panel manufacturing plant to instead focus on the installation of solar rooftop systems. SPWR is closing the facility and spinning it off to a new company, Maxeon Solar. The company recently won the contract to install solar at the Sony Pictures Entertainment (SPE) studio lot in Culver City, California. It is anticipated that this solar installation should reach full operation by early 2020, the company announced. Sony seeks to achieve a zero environmental footprint by 2050. The move by SPWR to focus on solar installations is the opposite of that made in September by First Solar Inc. when it stopped building solar farms and in turn focused on manufacturing. SPWR stock closed at $7.24, up 2.19% at market close Friday, December 6.
First Solar’s (NASDAQ: FSLR) expanded manufacturing footprint in the U.S. has made it the largest photovoltaic (PV) module solar manufacturer in America and the Western Hemisphere, the Wall Street Journal reported. Mark Widmar, CEO of First Solar, praised the scalability of the company’s solar technology. The company engages in designing, manufacturing, marketing and distribution of photoelectric systems and solar modules. FSLR began production at its second manufacturing facility in the U.S., located at Lake Township, Ohio. Its flagship facility is in Perrysburg, Ohio. Both manufacture the First Solar ‘Series 6’ module, which employs the company’s proprietary thin-film technology. It was developed in FSLR’s R&D centers in California and Ohio. Common stock closed at $53.37 on December 6, rising 2.05%.
SolarEdge Technologies (NASDAQ: SEDG) in its earnings call for Q3 2019, management, including Zvi Lando, acting CEO, discussed its record revenues of $411 million for the three months. Generating $388 million was the company’s solar business. Some 51% of the company’s solar revenues came from the U.S., Europe generated 40% of the solar revenues at SEDG and the remaining 9% came from the rest of the world, management of SEDG said on the earnings call with securities analysts. SEDG anticipates a similar allocation will be seen for the fourth quarter of 2019. For the first time, solar at SEDG passed the $1 billion mark for the fiscal year. SEDG stock reached $83.93 through the close Friday, rising by1.25%.
Canadian Solar Inc. (NASDAQ: CSIQ) has completed the sale of its 49% interest in three solar photoelectric projects to Korea Electric Power Corporation (KEPC) and Sprott Korea. As the developer of these three projects, CSIQ will supply the modules and manage the construction. Post-attaining commercial operation, KEPC and Sprott Korea will then acquire CSIQ’s remaining interest in these projects. A Zacks Equity Research Report in Yahoo! Finance, also said that CSIQ’s footprint in solar in the Mexico market will be further strengthened by recent investments there by KEPCO and Sprott. In addition to Mexico solar, CSIQ has already widened its presence in the global solar market with a diverse customer base, the report said. CSIQ for Q4 2019 has set guidance range at $850 million-$880 million and gross margin at a range of 19-21%.
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