Solar energy: has the smart money seen the light?

Follow the money…

The big news in solar energy this week was the acquisition of Power-One — manufacturers of the fable Aurora Inverters — by the Swiss energy giant the ABB Group for one billion dollars. For those among us who will never see $1,000,000,000, to give you an idea of its worth, its about half of what celebrity Oprah Winfrey charged for her recent Australian appearance.

This is completely made up of course, apologies in advance to Oprah fans.

Founder of SQHQ,  Finn Peacock, is a big fan of Aurora Inverters and covers why he thinks the move by the Swiss energy giant is a positive one, which he expects will see Aurora topple SMA as the world’s leading producer of inverters.

For Finn’s thoughts, see article here.

However as reader and well-known Australian journalist Matthew de Silva pointed out in a Facebook comment to the post, the acquisition of Power One by ABB is a major boost for solar power. Let me explain. Previously major energy companies treated solar companies as children were in the Victorian era: seen and not heard. However the trend lately, of which the Power One purchase is a prime example, has been the rush to be part of the solar energy scene.

ABB is one of the world’s largest conglomerates with energy very much a core part of its business dealings, as Matthew pointed out they very much expect a good profit return on any of their acquisitions.

The question is then: will this trigger more investment by big energy firms in smaller solar companies? Perhaps this massive cash payment will show the coming of age in solar energy? Bigger picture questions may also be asked here. Have energy companies seen “peak oil” as the beginning of the end for fossil fuels and are looking to solar as the future in energy needs?

Clearly the purchase puts the ABB Group as one of the world’s leaders in the manufacture of solar inverters. ABB’s CEO, Joe Hogan said in an April 22 press release that solar’s grid parity with fossil fuels was a major factor in the purchase of the innovative inverter technology company.

“Solar PV is becoming a major force reshaping the future energy mix because it is rapidly closing in on grid parity,” Hogan said. “Power-One is a well-managed company and is highly regarded as a technology innovator focusing on the most attractive and intelligent solar PV product. The combination of Power-One and ABB is fully in line with our 2015 strategy and would create a global player with the scale to compete successfully and create value for customers, employees and shareholders.”

With other savvy investors such as Warren Buffett making clear their intention to invest in solar, maybe the smart money’s on solar?