The companies, which are presently in advanced talks, will sign a master formation agreement and then plan to register yieldco with the US Securities and Exchange Commission for an initial public offering (IPO) of limited partner interests in the JV.
The parties have not assured the formation of the JV or the completion of the IPO or any other transaction that will occur in future.
The establishment of yieldco and completion of the IPO are subject to the completion of definitive documentation, board approval by each party and regulatory approval.
Bloomberg reported that the JV will be part of an increasing move in the renewable energy sector to pool projects into publicly traded entities that provide shareholders payouts, known as yieldcos.
Several companies like Abengoa and NRG Energy currently sell the completed energy projects to their yieldco affiliates and use that investment in the construction of new plants.
In November 2014, First Solar said it will not spin off its solar power plants into a separate, publicly traded entity. SunPower said it is planning to establish a yieldco for its projects.
SunPower designs, manufactures and delivers solar panels and systems while First Solar provides photovoltaic solar systems that utilize its module and system technology.
Image: First Solar and SunPower plan to set up a new YieldCo vehicle to undertake some of their solar power-generating projects. Photo: Courtesy of graur codrin/FreeDigitalPhotos.net.