America’s largest solar manufacturer is teaming up with a leading technological innovator in the field.
SunPower announced this morning that it will acquire SolarWorld Americas for an undisclosed sum. SunPower will take over operation of SolarWorld’s manufacturing facility in Hillsboro, OR. The deal gives the largest American solar manufacturer the backing of one of the industry’s leading technological innovators. It should help both companies stay competitive and keep prices down for consumers.
With the acquisition, SunPower hopes to avoid the tariff on solar imports imposed in February. Under the tariff, foreign manufacturers pay a 30% tax on cells and modules imported to the United States for sale.
Silicon Valley is home to SunPower headquarters. But they outsource their manufacturing to Southeast Asia and Mexico. That will change when this deal finalizes. SunPower plans to assemble their low-cost P-Series module at the newly-acquired Oregon plant. Shifting manufacturing efforts into the U.S. effectively bypasses the tariff.
This move seems to be a savvy way for SunPower to remain competitive in the American market. Most solar companies will opt to raise prices to offset increased import costs. Instead, SunPower will plug into SolarWorld’s established manufacturing and distribution infrastructure. This should soften the impact of the tariff and keep their prices affordable.
The result for consumers? A technological leader joins forces with an experienced American manufacturer. This deal helps both SunPower and SolarWorld stay competitive. We expect any pricing changes on their product lines to be negligible.
A Win-Win Deal
The deal is a major victory for SolarWorld. They’ve been around for over 40 years and have proven to be the most resilient solar brand in America. But their growth has not come without its rough patches.
SolarWorld’s German parent company, SolarWorld AG, filed for bankruptcy in 2017. Since then, SolarWorld Americas trimmed their workforce and cut back research and development.
As a result, SolarWorld has struggled to compete with the cheap import market. Last year, they joined Suniva to lobby for the tariff which was eventually enacted this February. Ironically, that same tariff drove SunPower to seek American manufacturing options.
The SunPower acquisition provides much-needed relief to help them stabilize. SunPower has pledged to invest capital to reignite SolarWorld’s R&D efforts. SunPower will also fund improvements for the Oregon manufacturing facility.
The partnership is ideal for SolarWorld. SunPower is a technological leader in the solar industry. Their premium modules are among the most efficient products on the market. The new investment capital and guidance of a market leader bodes well for SolarWorld. We’re excited to see what innovations will come to their products in the near future.
The Oregon facility SunPower inherits will also continue to produce SolarWorld-branded legacy products. That’s great news. SolarWorld’s longevity as an American manufacturer has earned them a loyal following. We want to see their full product line remain on the market.
SolarWorld’s CEO, Jürgen Stein, commented on the impact the deal will have on his company’s operations:
“We are delighted that SunPower has agreed to inject fresh capital and their industry leading P-Series technology into SolarWorld Americas operations here in Hillsboro. Our hundreds of long-time employees are excited to be part of this next chapter in SolarWorld Americas’ long history. We are thrilled about this acquisition as it means quite simply, that our company can look forward to redoubled strength as it continues to innovate and expand into the future. This outcome is ideal for SolarWorld Americas and its employees.”
Wall Street seems to agree that this is a strong move for SunPower. SPWR opened at $8.81 on Wednesday, the day news of the acquisition went public. The stock continues to rise a day later, peaking at $9.77 a share at the time of publication.
The acquisition is not final until U.S. and German trade officials approve it. SunPower expects the deal to become official by the end of June.