Solar company spinoffs lure investors with dividends

Thu Jan 16, 2014 12:49pm EST
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* SunEdison to list first pure-play solar "yield co" in U.S.

* NRG Yield, which holds some solar assets, up 42 pct since debut

* JinkoSolar, Canadian Solar looking at power plant spinoffs

By Swetha Gopinath and Sayantani Ghosh

Jan 16 (Reuters) - Long shunned by cautious investors, solar companies have hit on a new way to deliver returns to shareholders that could attract new money to an industry notorious for its stock price volatility.

SunEdison Inc is the first of a wave of companies preparing to bundle up existing solar power plants and then spin them off into separate entities, known as "yield cos", to raise money to build new plants.

The promise of regular dividend payouts, hitherto unknown in the solar industry, offers an entry point to the sector for retail investors and is expected to generate huge demand when these companies go public, analysts and investors said.

"Yield cos appeal more to people who are looking for a safe way to invest in solar, protected from the volatile stock prices of manufacturing companies," said Edward Guinness, co-portfolio manager at Guinness Atkinson Asset Management.

Bruised by a two-year slump in the price of panels, solar companies are exploring new and cheaper ways to finance growth and meet rising demand for solar power.   Continued...