Total, the fossil fuels giant, just gave itself a renewable energy makeover by finishing up its $1.3 billion purchase of a majority stake in SunPower, the San Jose, Calif.-based designer and manufacturer of solar panels and systems.
SunPower sells its solar technology and services to customers of about any size, including at the residential, business, government and utility level.
Let’s put the scope of the Total-SunPower deal in perspective. According to research by the Cleantech Group and Deloitte, for all of 2010, venture investments in cleantech companies of any stripe worldwide totaled $7.7 billion across 715 deals, and the solar segment attracted 24 percent of those dollars. Worldwide venture investments in solar companies for 2010 totaled $1.83 billion across 117 deals. In 2009, venture investments in solar companies totaled $1.34 billion.
[Ed’s note: Cleantech VC money has never looked so Monopoly! The traditional oil and gas purse, on the other hand, looks bottomless.]
In a press statement about the SunPower acquisition, Total touched on its previous involvement in solar:
“Through its joint venture affiliates Tenesol and Photovoltech, Total has built expertise along the photovoltaic solar power chain to make this technology more reliable, efficient and competitive. Tenesol is a French solar panel manufacturer with an industrial footprint in Toulouse (France) and Cape Town (South Africa). Total is also a large minority shareholder in [U.S.-based solar technology businesses] Konarka and AE Polysilicon.”
The company is expected by industry insiders to reorganize its entire business, globally, around its latest acquisition.
With traditional energy companies like Total buying up solar at this level, and huge amounts of competition from Chinese solar manufacturers and developers, do U.S. startups and newly public companies in solar have a chance to survive without ceding control?
“We will see a number of winners in solar. In the U.S., category leaders like Brightsource and MiaSole will thrive as independent companies, while a number of others will struggle on their own and be acquired.
I do not see the SunPower acquisition as a sign of weakness, at all. They sold for a big premium and gained access to a huge new balance sheet, including a $1 billion debt facility that Total did through the equity deal.”
Making the case that worldwide demand will remain strong enough to support new entrants in solar (yes, even American ones) a report today from the International Energy Association (IEA) forecasts that “by 2050, solar photovoltaics will provide 11 percent of global electricity production.” That amount of solar power represents a potential reduction in greenhouse gas emissions by about 2.3 gigatons, equivalent to reducing emissions from electricity use from 253 million homes per year, nearly the combined populations of Russia and Japan the report said.