Vancouver’s Plutonic Power Corp. (TSX:PCC) is entering the Ontario solar energy market with a unit of General Electric Co. (NYSE:GE) through the joint purchase of three yet-to-be-built solar energy farms projected to generate 50 megawatts annually.
The deal is also GE Energy Financial Services’ first solar investment in Canada.
The long-time partners are buying the facilities from Arizona-based solar panel manufacturer First Solar Inc. (Nasdaq:FSLR).
Plutonic and GE already jointly own the Dokie wind project, which is one of only two operating wind farms in B.C.
As well, the partners operate the largest independent, run-of-river hydro project in B.C., the East Toba River and Montrose Creek hydroelectric project.
That project went online in spring and summer of 2010 (See “Largest independent run-of-river project in B.C. goes online” – BIV Daily Edition, August 9, 2010.)
Donald McInnes, vice-chair and CEO of Plutonic, said Plutonic and GE are exposed to little risk in purchasing the solar facilities as the deal will not be completed until First Solar completes construction of the facilities.
He said the deal adds new technologies and geographies to Plutonic’s portfolio, providing diversification.
“Ontario is the largest market in Canada and it’s committed to ending its coal-powered energy generation,” he added.
Construction of the three solar facilities is expected to begin by mid-2011, pending permitting.
GE will hold a 90% stake in the projects. Plutonic will hold a 10% stake.
Plutonic is expected to make an equity contribution of approximately $6 million and serve as the projects’ managing partner.
Project debt is to be arranged by First Solar on behalf of Plutonic and GE.
First Solar will continue developing the three facilities – Amherstburg (10 MW), Belmont (20 MW) and Walpole (20 MW) – and will provide engineering, procurement and construction services and operations and maintenance services under long-term contracts.
The partners said the projects – whose power will be sold to the Ontario Power Authority under 20-year energy purchase agreements – will create more than 600 construction jobs.
The facilities could produce enough sustainable electricity to power approximately 6,300 local homes.
Plutonic’s share price had risen 8% to $2.35 during mid-morning trading on Wednesday.