Author: Jason Deign, Solarplaza
A Solarplaza analysis of published yieldco data confirms what some observers have already claimed: recent troubles with the traded vehicles are essentially a US phenomenon.
While all US yieldcos have decreased in share price in the year to date, only three out of five firms listed in Canada have lost value, with the biggest loss being 6.12% at TransAlta Renewables. Canada’s Northland Power, however, is up 13.96%.
Capstone Infrastructure is also up, by a modest 1.58%. At the same time, half of the UK’s yieldcos have registered modest gains in the year to date, with John Laing Environmental Assets leading the charge on the back of a 2.66% rise.
Outside of Canada, the UK and the US, Spain’s Saeta Yield is down 17.03% but Germany’s Capital Stage has grown a remarkable 79.55%.
These two figures represent the extremes of non-US yieldco variability, which could be summed up as a mixed bag: six companies are up, seven are down, but only one of the falls is in double digits while two of the rises are above 10%.
This diverse set of results contrasts sharply with the situation in the US, where share prices have dropped in double digits across the board and falls range from 12.44% at Pattern Energy Group to 48% at SunEdison’s yieldco, TerraForm.
Reduced valuations have helped to boost yields across the yieldco market; 16 out of 21 companies for which data is available have produced yield levels above 5%.
Capstone Infrastructure, which has 20 MW of solar in a 535 MW portfolio, leads the yield league table at 9.32%.
Behind it comes US-listed Abengoa Yield, with 8.36%, Saeta Yield, with 8.04%, TransAlta Renewables, with 7.71%, and TerraForm Power, with 7.24%.
TerraForm chief executive Carlos Domenech defended his company’s performance in an earnings call this month. “In the third quarter, we generated cash available for distribution [CAFD] of USD$71 million,” he said.
“This was up 9% from the prior quarter and more than doubled the CAFD from the same period a year ago. During the quarter, we acquired 34 MW of solar power plants from SunEdison, increasing our run-rate CAFD by an additional $6 million.”
At the same time, experts are saying that recent unrest in the US yieldco market will die down next year, with predictions of muted growth.
Overall, what our analysis shows is that the challenges facing the yieldco model may not be as severe as some may have believed. While it is clear that many companies have sustained severe losses in value, this appears to be largely confined to the US. Experts there have quite rightly questioned the model and there is a sense that lessons have been learned.
Overall, said Solarplaza Chief Operating Officer Paul van der Linden: “What our analysis shows is that the challenges facing the yieldco model may not be as severe as some may have believed.
“While it is clear that many companies have sustained severe losses in value, this appears to be largely confined to the US. Experts there have quite rightly questioned the model and there is a sense that lessons have been learned.”