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SunPower, Hannon Armstrong Ink Deal For 30% Solar Tax Credit

Zacks Equity Research

SunPower Corp. SPWR recently signed a joint venture (JV) agreement to acquire and deploy 200 megawatts (MW) of safe harbored panels with Hannon Armstrong Sustainable Infrastructure Capital, Inc. HASI. The deal is expected to preserve 30% federal Investment Tax Credit (ITC) which will drop to 26%, a first step to further decrease the following years to zero in 2022 and beyond.

Reason Behind the Deal

SunPower focuses on providing complete solar power generation solutions to its customers. Meanwhile, Hannon Armstrong provides capital and services to the energy efficiency, renewable energy and other sustainable infrastructure markets in the United States. In Nov, 2018, the companies entered into a JV to acquire, own, manage, operate, finance and maintain a portfolio of residential solar pv systems as well as invest $10 million in residential solar leases. In June 2019, the two companies along with SunStrong Capital Holdings, LLC, secured financing commitments for its residential solar lease program to help SunPower meet its expected customer demand into 2020.

Moreover, the Safe Harbor process freezes the 30% ITC for the project, which will enable customers to save more money. We believe that this deal will help the company retain its customers and encourage them to deploy more solar facilities.

Focus on Clean Energy

Increasing awareness for a cleaner environment has fueled the usage of renewable clean energy sources for power generation. To tap into growing demand for solar products, SunPower has already undertaken several initiatives to strengthen existing operations and ramp up production volumes. The company is one of the most forward-integrated solar companies, having more than a decade of experience in designing, manufacturing and supplying large-scale solar systems. The company is also gaining opportunities enabled by ITC extension. In 2019, the company expected to spend $65 million.  

The solar market is expanding rapidly in the United States. Per a recent release by the U.S. Energy Information Administration (EIA), electric power sector generation from wind and solar energy will grow from 414 billion kilowatthours (kWh) in 2019 to 471 billion kWh in 2020. Other than SunPower, solar players like, SolarEdge Technologies, Inc SEDG, First Solar, Inc. FSLR are expected to gain from such projections.

Price Movement


In a year’s time, shares of SunPower have surged 50.9% compared with the industry’s 51.8% rise.

Zacks Rank

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

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Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) : Free Stock Analysis Report
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