SunPower to Spin Off Manufacturing, Focus on Rooftop Solar

Nov. 11, 2019
The new manufacturing company, Maxeon Solar, will be based out of Singapore.

U.S. solar panel maker SunPower Corp. will spin off the majority of its global manufacturing operations into a separate company that will partly be owned by a Chinese firm.

Newly formed Maxeon Solar will be based in Singapore and produce panels in France, Malaysia, Mexico and the Philippines. SunPower will focus on residential and commercial solar and storage installations in the U.S., according to a statement Monday.

The deal shows how solar companies that once produced and installed panels are narrowing their focus as the market matures. In September, the largest U.S. panel maker, First Solar Inc., walked away from the business of building solar farms to focus on manufacturing. Now SunPower is moving in the opposite direction, shedding its factories to rely almost entirely on rooftop installations.

“As the industry gets bigger, you get companies that specialize,” Chief Executive Officer Tom Werner said in an interview. “It’s part of the mainstreaming of solar.”

As part of the deal, China’s Tianjin Zhonghuan Semiconductor Co. -- a supplier of silicon wafers -- will make a $298 million equity investment in Maxeon. SunPower shareholders will receive about 71% of Maxeon shares. TZS will own the rest.

SunPower, whose largest shareholder is oil giant Total SA, rose as much as 15%. The stock was up 4.1% at 11:28 a.m. in New York.

Werner will continue to run SunPower, which will remain based in San Jose, California. It will continue operations at a panel factory in Hillsboro, Oregon. Jeff Waters, who is now chief executive officer of SunPower’s technologies business unit, will be Maxeon’s CEO.

The deal will be tax-free for SunPower shareholders. The transaction in expected to be completed in the second quarter of 2020.

“It makes sense to split the two different businesses now, because the business models are very different,” Bloomberg Intelligence analyst James Evans said in an interview.

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