sPower and JinkoSolar Partnership Brings 34 Megawatts of Solar Power to Antelope Valley, California
3 days 2 hours 21 minutes ago - DJNF
sPower Completes Construction on Four Solar Projects in Lancaster and Victorville, California
SALT LAKE CITY and SHANGHAI, Oct. 17, 2014 /PRNewswire/ -- JinkoSolar Holding Co., Ltd. ("JinkoSolar") (NYSE: JKS), a global leader in the solar photovoltaic (PV) industry, and sPower (Sustainable Power Group), a prominent renewable energy provider, announce details of the first partnership between the two companies.
According to the terms of the contract, JinkoSolar supplied nearly 115,000 of its 305W high efficiency solar PV modules to sPower for the 34MW solar facility, which is comprised of four separate projects located in Lancaster and Victorville, California.
"This is a significant milestone for sPower -- bringing online the first major group of projects after our merger with Fir Tree-backed developer Silverado Power earlier this year. The development of these projects has brought jobs and economic benefits to the Antelope Valley, while providing a sustainable future in the area," said sPower CEO, Ryan Creamer. "We look forward to teaming with JinkoSolar on many more projects. Their experienced team is extremely capable, and we are pleased with the quality and performance of their PV modules."
Oct 13, 2014 (Bloomberg) :: China is drafting plans to promote utility-scale projects in sunny areas with good grid conditions. China will offer loans on preferential terms to solar power projects. It will encourage financial institutions to set up investment funds backing solar projects, the statement said.
Sentiment: Strong Buy
Yes but credit in China was changed a few years back. They were restricting credit for new capacity since China had over 60GW of capacity and lots of idle capacity. Instead they have started to implement credit for the end projects which passed the buck through all the segments. So if they need to raise a portion of their own cash like in projects 30% and for capacaity expansion and inventories then the way they raise it is through dilution.
Their capacity for modules is target 3GW by the end of the year. Their target cell capcity is 2GW. Their target wafer Capacity is 2.5GW. Page 2 of the presentation for the Q2 Con call.
Their low cost is predicated on all internal manufacturing. They can not get the 3.3GW guided with the new increase in projects from that 2GW cell. Thus 1/3 is outsourced for the most expensive part of the product. Next year presuming a 20% growth they need to be at 4GW or 1GW more in capacity vertical else margins will get supressed from the module business.
As for the project numbers, you suggested they get lots of cash, what are your numbers? Or do you not have any?
Very volatile.Tough as investment.Bought at $20.20 ,hopefully it's the bottom.
The capacity is 3GW for FY2014, it's 2.8 for Q3 2014 i.e. they will have 50% more capacity by year end. You started your earlier post with an incorrect assumption. They revised their full year 2014 project development guidance upwards from 400 megawatts to above 600 megawatts. That's 50% increase. Projects are where you make the most money. I can't comment on your financial assumptions, since I don't know the terms. However I'm convinced that Jinko Solar has the best prospect and at the same time most undervalued solar company. CSIQ and TSL will come second and third on that list.
Sentiment: Strong Buy
To be practical, the presentation for Q2 on the Website states module capacity is at 2800MW not 3GW. The Cell capacity is at 1800MW or down 200MW from Q1. It is the wafer and cell capacity that matters and is what is the cost for expansions. Module capacity add has always been dirt cheep.
As for a Yieldco, options that is a plus for them. But how much cash do they really generate and do they put that back into the power business or do they use it fr core modules.If they sold everything I estimate they get returned roughly $640M on the 800MW. Not bad considering they invested around $0 of their own money after selling near half to a private investor.
Each MW of power produces 28KWhr at $0.18 subsidized or roughly $5 per watt. The long term 20 year cash generation is $4Billion on the 800MW. Investors in yieldcos generating a 7% return command nearly $3.80 in total cash back based on a $1.40 cost to purchase each watt. That leaves around $1.20 in cash returned to Jinko and partner for around $960M. They get half that or $480M. The yieldco will return the initial investment and interest paid to date or roughly $1.40/watt. Of this Jinko should get around 15%(half the 30% down to build) or appx $0.21/watt . The other half goes to the other investor and to the lender. That is around $160M returned to them for their initial investments. Total cash generation from the yielco is then probably around $640M.
I did not include the $250M they got from the partner but they did spend an extra $120-$160M that was part of the near half ownership. So the cash generation from that remained is around $100M on top of the $640M. Total cash returned roughly $740M from their initial investments.
Like I said, they will liekly need $500M cash. Some come from profits, some from sales and likely another secondary