Are PPAs Still Playing Their Part In The Expansion Of Solar?

Alight is a company riding the solar-coaster and enjoying the heights.

In November 2021, David Banmiller sat down with Harald Overholm, co-founder and CEO of Alight.

The focus of that discussion was on the emergence in popularity of Power-Purchase Agreements, in the solar sector. Alight, as one of the biggest providers in the Nordics, was looking to continue expansion throughout Europe. Since then, there’s been exponential growth and evolution in solar, and the way businesses and homes source that energy.

In November 2022, Alight raised about €150 million to expand their operations. This was a major milestone for the relatively small company at the time. Managing to secure equity in the market, they worked with various partners, ultimately partnering with an infrastructure fund, DIF.

DIF, being one of the leading mid-market infra funds specializing in renewables, was instrumental in driving the company to expand its team and strategically take control of certain projects.

Alight's key play was transitioning their role from being developers to becoming an independent power producer. As a PPA, Alight gained the ability to select which projects to develop, devise strategies to monetize them, and ultimately derive profit. This significant shift has been a cornerstone of their recent progress.

The solar industry, as it expands quickly, provides opportunities, but it also presents potential obstacles. A primary concern, as Harald explores with David, is the heavy reliance on China for polysilicon production, a foundational component of solar cells. This poses potential supply chain risk, fuelling the argument for diversifying polysilicon production.

While challenges might lie ahead, the surge of interest from investors, the potential of new enhancing technologies, and the increasingly favourable view of solar power are a key part of the energy transition that keeps the industry optimistic.

The key to sustained success lies in the ability of companies like Alight to ride the high times and the low times. With the right balance of financial backing, strategy, and a focused vision, solar energy companies are poised to illuminate the path towards a greener future.

For more on this topic, check out the recent episode of the Energy Gang, our sister podcast which you can find here: https://www.woodmac.com/podcasts/the-energy-gang/riding-the-solar-coaster/

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