First Solar Inc. is in talks with SunPower Corp. to establish a joint “yieldco” in which both companies each expect to contribute a portfolio of selected solar generation assets from their existing portfolio of assets.
Once talks have been concluded, the two companies intend to form the “yieldco”which will be listed. A “yieldco,” typically provides power under long-term contracts and pays out a portion of its cash flow to shareholders. The benefit of this arrangement is that the “yieldco” can have access to cheap funding
The formation of the joint venture and the IPO is subject to each company’s board approval and regulatory approval. First Solar and SunPower are two of the largest solar panel-makers in the US.