Skip to Content

Why Solar Giant SunEdison Might Be Doomed

Once one of the biggest names in solar, the troubled energy company faces lawsuits, huge debts, and possible bankruptcy.

Shares of SunEdison were up more than 10 percent Tuesday after the cancellation of the solar giant’s disastrous acquisition of residential solar developer Vivint. The $2.2 billion deal fell apart after billionaire hedge fund manager David Tepper sued to block it—but the real cause was less Tepper’s objections and more SunEdison’s overall financial disarray.

Despite the bump in stock price, the troubled company, based in Saint Peters, Missouri, is far from turning itself around. SunEdison, which has seen $10 billion in market value evaporate over the last year, has been justifiably called “the biggest corporate implosion in U.S. solar history,” as its strategy of acquiring seemingly every solar power company in sight hasn’t panned out. Under CEO Ahmad Chatila, the company has spent billions to acquire solar developers around the world, piling up nearly $12 billion in debt.

The company’s complex financial structure is only making matters worse. In 2014 SunEdison created a pair of “yieldcos”—publicly traded subsidiaries created to own completed solar projects. Yieldcos have become a favored structure for big solar companies because of the tax benefits and cash flow they provide, but at least in SunEdison’s case, Wall Street has soured on the strategy. The crash in its stock left SunEdison unable to shoulder the Vivint purchase or to complete other signed deals.

Now the company almost certainly faces a lawsuit from Vivint. It’s already being sued by Latin America Power, which it agreed to purchase for $733 million, and it faces millions of dollars in penalties for last month’s cancellation of planned solar projects for Hawaiian Electric.

The company has also delayed its 2015 earnings report while it conducts an internal investigation into the accuracy of its financial disclosures. In a statement, the company said that inquiry could cause the company to “reassess its liquidity position.” In other words, SunEdison, once the world’s largest developer of renewable energy projects (and No. 6 on MIT Technology Review’s 2015 list of 50 smartest companies), could file for bankruptcy very soon.

(Read more: Reuters, Bloomberg, Wall Street Journal)

Keep Reading

Most Popular

individual aging affects covid outcomes concept
individual aging affects covid outcomes concept

Anti-aging drugs are being tested as a way to treat covid

Drugs that rejuvenate our immune systems and make us biologically younger could help protect us from the disease’s worst effects.

Europe's AI Act concept
Europe's AI Act concept

A quick guide to the most important AI law you’ve never heard of

The European Union is planning new legislation aimed at curbing the worst harms associated with artificial intelligence.

Uber Autonomous Vehicles parked in a lot
Uber Autonomous Vehicles parked in a lot

It will soon be easy for self-driving cars to hide in plain sight. We shouldn’t let them.

If they ever hit our roads for real, other drivers need to know exactly what they are.

crypto winter concept
crypto winter concept

Crypto is weathering a bitter storm. Some still hold on for dear life.

When a cryptocurrency’s value is theoretical, what happens if people quit believing?

Stay connected

Illustration by Rose WongIllustration by Rose Wong

Get the latest updates from
MIT Technology Review

Discover special offers, top stories, upcoming events, and more.

Thank you for submitting your email!

Explore more newsletters

It looks like something went wrong.

We’re having trouble saving your preferences. Try refreshing this page and updating them one more time. If you continue to get this message, reach out to us at customer-service@technologyreview.com with a list of newsletters you’d like to receive.