- Factory was initially expected to begin production this year
- SunEdison filed biggest U.S. bankruptcy of the year Thursday
SunEdison Inc. is reconsidering its plan to build a solar-panel plant in Brazil after the embattled clean-energy developer filed the biggest U.S. bankruptcy of the year.
The company expects to make a final decision within six weeks, Carlos Barrera, SunEdison’s vice-president for Latin America, said in a phone interview Friday.
The shift comes in response to both SunEdison’s financial distress and Brazil’s slumping economy, Barrera said. The Maryland Heights, Missouri-based company filed for Chapter 11 protection in New York Thursday, with $16.1 billion in liabilities.
“The development of the solar panel plant is delayed and we haven’t decided yet if we are going to build it or not,” Barrera said. “Brazil’s situation and ours changed in the last year.”
SunEdison is analyzing its portfolio of assets in the region to identify ones that can be sold. The money will be used to invest in business growth, according to Barrera.
Brazil gets less than 1 percent of its electricity from solar power and has almost no domestic photovoltaic production. The government has set a goal of having 3.5 gigawatts of solar systems in operation by 2023, producing about 1.8 percent of the country’s energy.
That effort is threatened by the country’s weak economy. The plunging local currency, tighter credit markets and political instability are making it difficult for energy companies to meet agreements to build the first large-scale solar farms in the country.
To achieve its target, the government has organized auctions for solar projects. In an October 2014 event, contracts to sell power from 1,048 megawatts of solar farms were awarded.
Following that auction, SunEdison announced plans to invest $30 million in a facility to make photovoltaic panels and tracking systems, with a annual production capacity of 140 megawatts, to be in operation by 2016. The company’s first Latin American panel plant is already in operation in Mexico, with capacity of 400 megawatts a year.
SunEdison formed a joint venture with the local developer Renova Energia SA to build four solar farms with total capacity of 106.9 megawatts in Bahia state by 2017. The two companies expect to invest around 5 billion reais ($1.4 billion) to build power projects with 1 gigawatt of capacity over the next five years.
Those plans are changing, Barrera said.
“When we did the agreement with Renova, we had different conditions,” said Barrera. “Now both companies are talking to see what the best way to advance in the agreement is.”