Sharp Corp. will sell its Recurrent solar operation to a U.S. unit of Canadian Solar Inc. for $265 million, or 13 percent less than it paid five years ago, in the latest move to scale back operations outside Japan.
Sharp paid $305 million for San Francisco-based solar-development unit Recurrent Energy LLC in 2010 and had been looking for a buyer since at least September. The sale will be completed in March, Sharp said in a statement today as it also forecast an annual loss of 30 billion yen ($257 million).
The exit further frees Osaka-based Sharp to focus on its home market, which has grown following the introduction in 2012 of incentives to build clean energy projects. Outside the country, the company has been facing competition from cheaper panels made by Chinese rivals.
Recurrent, founded in 2006, has developed and sold more than 520 megawatts of solar projects and has a project pipeline of 3.3 gigawatts and 1.1 gigawatts in signed contracts, with developments across North America including California and Texas, according to its website
“We are excited that our vision for Recurrent Energy’s path forward is very much aligned with that of Canadian Solar,” Recurrent Chief Executive Officer Arno Harris said in a statement. “It was critical for us to find a counterparty that saw the value of our team, our project development platform and our project pipeline.”
Sharp will transfer all interests in Recurrent Energy, which it owns through Sharp U.S. Holding Inc., to Canadian Solar Energy Acquisition Co., a U.S unit of Canadian Solar.
The purchase expands Canadian Solar’s project pipeline to 8.5 gigawatts, Canadian Solar said in a separate statement. Though based in Guelph, Ontario, Canadian Solar makes most of its products in China.
“Canadian Solar is going to continue to operate Recurrent as an independent entity, much like we have with Sharp,” David Brochu, chief operating officer at Recurrent Energy, said in a phone interview. Recurrent will source solar panels competitively and consider using those made by their new parent, he said.
Sharp last year withdrew from an Italian solar venture, the company’s last overseas panel manufacturing plant, shortly after announcing that it would give up its half share of a separate undertaking with Enel Green Power to develop solar projects.
Sharp, which has been developing solar panels since 1959, stopped making panels at plants in the U.S. and U.K. earlier last year.