Shell to acquire 44% stake in solar developer Silicon Ranch

The pioneering Southern solar developer will now be backed by Europe’s largest oil and gas company.

January 15, 2018 Christian Roselund

Standing left to right: Silicon Ranch board member Byron Smith; Shell GM Solar Projects, Shell New Energies, Boris Schubert; Silicon Ranch Co-Founder and CFO Reagan Farr; Silicon Ranch Chief Corporate Development Officer David Vickerman; Sitting left to right: Silicon Ranch Chairman Phil Bredesen; Shell VP of Solar Marc van Gerven; Silicon Ranch Co-Founder and CEO Matt Kisber.

PRNewsfoto/Silicon Ranch Corporation

The involvement of oil and gas “supermajors” in clean energy has been an off-again, on-again affair. Perhaps the most well known story was BP’s 20-year adventure with solar manufacturing, which ended just as the global solar industry began to ramp up in 2011. A more promising example is Total’s majority ownership of SunPower.

Shell is also no stranger to solar, as Japan’s Showa Shell Sekiyu has been the financial backing behind the world’s only large cadmium indium gallium diselenide (CIGS or CIS) solar manufacturer, Solar Frontier. However, today Royal Dutch Shell itself dipped its toes into solar development with a roughly $200 million investment in Tennessee’s Silicon Ranch.

Shell has agreed to acquire a 44% interest in the developer from funds managed and/or advised by Partners Group. The transaction is expected to close in Q1 2018, and Shell will pay between $193 and $217 million, contingent on Silicon Ranch meeting certain milestones. A separate agreement will allow Shell to up its stake in the developer later if it chooses to.

Shell notes that the acquisition is part of its global New Energies portfolio, and will complement its sale of wholesale power in the United States.

Silicon Ranch will keep its existing management and the Silicon Ranch brand. In acquiring the company, Shell has bought a stake in a pioneering developer that has built a lot of solar in places where the technology was largely unheard of.

Among the company’s 880 MW of solar either already built, contracted or under construction are some of the first large solar projects in the Southern states of Tennessee, Arkansas and Mississippi, including a 50 MW solar plant in Hattiesburg, Mississippi.

Silicon Ranch also may be well suited to weather the current Section 201 trade case. In previous years the company has signed a number of large supply deals with First Solar, whose cadmium telluride thin film PV modules are not covered by the scope of the Section 201 investigation. Silicon Ranch has further informed pv magazine that it has modules secured from First Solar and other Tier 1 suppliers for all of the projects which it plans to build through the end of 2019.

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