SunEdison (formerly MEMC Electronic Materials) turns sun into power. The company not only makes solar modules, polysilicon, and silicon wafers used in solar panels, it also designs, makes, installs, and maintains solar installations for individuals and corporate customers. The company has 2.4 gigawatts of electricity-producing panels installed and a pipeline of 5.1 ggawatts. It has also begun generating electricity from solar power and selling that electricity to utility customers. The sale of silicon wafers and solar panels are becoming less of the company's business as it focuses on solar power. SunEdison spun off 20% of its silicon wafer fabrication business and part of its solar business.
SunEdison Semiconductor, the wafer business, completed its $94 million IPO in early 2014. TerraForm Power, a unit that owns and operate some of the company's solar power plants, raised more than $500 million in an IPO in 2014.
In many markets, including the US, installing solar panels involves prohibitive costs for consumers. To overcome that, SunEdison only charges customers for electricity generated by the systems. The company relies heavily on government subsidies. In 2014, SunEdison's solar energy segment generated 62% of its revenue, followed by semiconductor materials, 33%, and the Terraform segment, 5%.
The US was SunEdison's biggest market in 2014, accounting for 20% of sales, while Taiwan brought in 17% of revenue. Canada, at 14%, was the other country contributing a double digit percentage of sales.
SunEdison has manufacturing and administrative facilities in Italy, Japan, Malaysia, Singapore, South Korea, Taiwan, and the US.
Sales and Marketing
The company markets its wafers through a direct sales force and a global network of customer service centers. The duration of its sales agreements is generally one year or less. Its wafer customers include virtually all of the leading semiconductor device makers and foundries.
SunEdison's solar energy projects are sold directly, as well as through local and regional channel partners. SunEdison's solar energy customers include enterprises, governments, and utilities; it began offering solar systems to individuals in 2013.
The top customers for the semiconductor segment in 2014 were Samsung, 20% of sales, TSMC, 18%, and STMicroelectronics, 11%.
Overall sales increased 24% to $2.48 billion from $2 billion in 2013. Much of the rise came from the TerraForm Power segment, which had higher energy and incentive revenue associated with operating projects acquired and projects which began commercial operations since 2013. Megawatt hours sold rocketed to 722,411 in 2014 from 60,176 in 2013. Revenue in the solar energy segment increased on higher sales volumes and from recognition of previously deferred revenue. Net sales to residential and small commercial customers increased about $57 million in 2014 as compared to 2013 due to the acquisition of Energy Matters during the third quarter and other growth initiatives.
Higher operating costs helped double SunEdison's net loss to $1.18 billion in 2014 from $586 million in 2013. The company's negative cash flow from operations was $770 million in 2014, compared to $707 million in 2013.
In 2013 the company made major changes designed to move it toward its stated goal of developing large solar energy systems in the US and abroad. It closed a wafer plant in Italy it had previously idled then spun off 20% of its silicon wafer business and prepared to spin off part of its solar operations. The 2014 spinoffs of the semiconductor and terraform businesses gave SunEdison money to fund its solar operations.
In 2015 the company reached an agreement to develop and install four solar power plants for the City of Long Beach, California to deliver 2.5 megawatts of solar energy. The Long Beach follows others that SunEdison has made with other California companies such as San Jose and Huntington Beach. In North Carolina, SunEdison will connect four solar energy plants with a total capacity of 26 megawatts and the sll the energy to Duke Energy Progress over 15 years. In India, SunEdison and Omnigrid Micropower said they would team up to develop 5,000 rural solar projects in India. The 250 megawatt capacity would provide electric power to some resides who have no access to electricity.
Mergers and Acquisitions
The TerraForm subisidiary acquired 21 US distributed generation (DG) solar power plants generating 26 MW from SunEdison through a series of transactions valued at $47 million. The 21 power plants have long-term contracts with an average remaining life of 20 years. The portfolio includes municipalities, schools in seven US states.
In 2014 SunEdison and TerraForm bought First Wind, a developer, owner, and operator of wind projects in the US. With the purchase, SunEdison adds significant wind development to its portfolio.
Also in 2014 SunEdison bought 50 megwatts of solar photovoltaic projects in Massachusetts from BlueWave Capital LLC. The projects serve New Bedford, Bourne, Palmer, Webster, and Winthrop as well as several state colleges including Cape Cod Community College, Middlesex Community College, and the Massachusetts Maritime Academy. Several housing authorities are included, too.