Isra-Mart srl: Total secures SunPower stake in $1.3bn deal

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Total has successfully completed its takeover of SunPower after paying $1.3bn for a 60 per cent stake in the solar panel manufacturer.

The French oil giant made its initial offer at the beginning of last month, promising to accelerate the development of solar plants in the US and expand SunPower's manufacturing capacity. The move pushed SunPower shares up by more than 40 per cent.

Total was forced to extend the offer period after talks with the European Commission delayed the finalisation of the deal, but both companies confirmed yesterday that the process has been completed at a purchase price of $23.25 per share.

Philippe Boisseau, president of Total Gas and Power, said SunPower would now form the "centrepiece" of the company's solar business.

"Today marks a new stride forward for Total in the solar power industry," Boisseau said. "By combining the strengths of both groups, we have created a remarkable asset."

Tom Werner, SunPower president and chief executive, added that the investment, "significantly strengthens our company, accelerates our success in a broader marketplace and enhances our R&D efforts".

Other oil majors have retreated from solar in recent years, but Total's acquisition of a controlling stake in the second largest solar panel manufacturer in the US allows it to tap into a market that research firm Clean Edge estimates has grown from $2.5bn in 2000 to $71.2bn in 2010 and could top $113bn by the end of the decade.

The move came as trade group the Solar Energy Industries Association (SEIA) and GTM Research today released figures that show a 66 per cent rise in US installations of PV systems over the first quarter of 2011.

The SEIA says the US installed 252MW of PV over the three-month period, boosted by lower costs for solar systems and a flurry of projects started at the end of 2010 before the scheduled end to the federal solar grant programme. The loan guarantees were eventually extended to the end of this year and have so far provided more than $10bn of support to solar projects.

The latest developer to receive funds from the Department of Energy (DoE) is Sempra Energy, which was offered a $359.1m conditional loan guarantee yesterday for its 150MW project in Arizona, about 45 miles outside Phoenix.

The Mesquite Solar 1 project is the first phase of a planned 700MW development and will be among the first large-scale US plants to use transformerless and liquid-cooled inverter technology, which the DoE says improves energy output, cuts operating costs and improves reliability.