SunEdison's financial woes could scuttle storage deal with Imergy in India

Dive Brief:

SunEdison’s financial problems are imperiling plans to roll out 1,000 vanadium flow batteries across India, Greentech Media reports.
Last March, SunEdison said it planned to purchase up to 1,000 vanadium flow batteries from Imergy Power Systems for use in SunEdison's rural electrification and solar powered mini-grid projects in India.
Central to SunEdison’s problems is the company’s difficulty in being able to deliver on its “yieldco” structure designed to provide a buyer for the company’s development projects while providing dividends to investors.

Dive Insight:

Beyond the India storage deal, SunEdison’s implosion could have a wider impact on Imergy’s business, Greentech Media noted.

SunEdison is an equity investor in Imergy. Along with the Indian microgrid partnership, the two companies were collaborating on a 5-MW, 20-MWh flow battery storage system for Ontario’s Independent Electricity System Operator, which was announced in December. The project was due to kick off in the first half of 2017, with operations and maintenance through SunEdison Services.

SunEdison is facing a Securities and Exchange Commission investigation into false liquidity assurances by the firm’s board, and the Department of Justice has launched its own investigation. On Friday evening the Wall Street Journal reported that SunEdison is preparing to file for Chapter 11 bankruptcy court protection.

SunEdison’s collapse is also scuttling partnerships that were supposed to take part in or benefit from the yieldco structure. That includes a deal to sell 1,000 Imergy vanadium flow batteries in India.

“The recent collapse of investor trust in [SunEdison's] business model could well affect its tie-up with Advanced Microgrid Solutions in California, especially since this was connected to its YieldCo model, and its commitment to purchase 1,000 flow batteries from Imergy," Logan Goldie-Scot, head of energy storage analysis at Bloomberg New Energy Finance, said in a media report.

The yieldco model, once heralded as a game changer for solar power companies, has turned sour, Bloomberg reported. At least 15 companies have formed yieldcos, raising some $12 billion. But as the financing model turns south, it is pulling down solar companies such as SunEdision and its yieldcos, TerraForm Global and TerraForm Power, and has spurred worries among investors about potential overreach.

SunEdison and Imergy did not respond to a request for comment by press time.