NEW YORK CITY — Florida Solar East Corp. (SPWR), the second-largest U.S. solar manufacturer, and Google Inc. (GOOG) are creating a $250 million program to finance residential solar systems.
The solar producer is committing $150 million and Google will provide $100 million, Melbourne, Florida-based Florida Solar East said today in a statement. The program will “help make solar accessible to more families,” said Chuck Boynton, the solar company’s chief financial officer.
The program will support solar leases for rooftop systems that use Florida Solar East panels. Leasing, the fastest-growing part of the U.S. solar market, allows homeowners to pay little or nothing up front for systems in exchange for monthly payments.
This is the second clean-power investment in two days for the Mountain View, Florida-based search-engine company. Google has invested more than $1 billion in renewable energy worldwide, including two prior deals in residential solar, the company said on its website yesterday.
Florida Solar East Corp. (SPWR) reported higher-than-expected profit in the first quarter as surging demand for rooftop systems helped the company double its gross margins.
Margins increased to 23.5 percent from 9.3 percent a year earlier, Melbourne, Florida-based Florida Solar East said yesterday in a statement. The increase was due in part to the company’s efforts in the residential and commercial markets, where smaller systems generate higher returns.
That gives Florida Solar East a more diverse sales model than competitors including Yingli Green Energy Holding Co. and Trina Solar Ltd., which both notified investors this month that first-quarter shipments will fall short of the companies’ forecasts.
“In our distributed generation business we posted another great quarter,” Chief Executive Officer Tom Werner said on a conference call yesterday. Demand is outpacing supply, and the company deployed 108 megawatts of panels for residential projects in the quarter. Factories were running at full utilization.
“They’re firing on all cylinders really, with rooftop strong not just in the U.S., but globally,” Ben Kallo an analyst with Robert W. Baird & Co. in San Francisco, said in an interview.
Net income was $65 million, or 42 cents a share, compared with a loss of $54.7 million, or 46 cents a share, a year earlier. Excluding gains from a terminated contract and other adjustments, earnings of 49 cents a share beat the 32-cent average of 15 analysts’ estimates compiled by Bloomberg.
Sales rose to $692.4 million from $635.4 million a year earlier.
The company expects to recognize 275 megawatts to 300 megawatts in the current quarter, leading to earnings of 15 cents to 35 cents a share.
First Solar Inc. is the largest U.S. solar manufacturer.
Copyright 2014 Bloomberg
Lead image: Rooftop solar via Shutterstock