Oslo, April 11, 2008: Renewable Energy Corporation ASA (REC) has made a US$ 40 million investment taking a 20% equity position in Mainstream Energy, a leading US player in PV systems integration and distribution.
Mainstream Energy LLC (MSE) is well established as a leading PV systems integrator and distribution company in the US. MSE serves different customer segments through its operating companies, AEE Solar Inc. and REC Solar Inc. (the latter not to be confused with the division within the REC Group with the same name). MSE expects sales revenues in 2008 of approx. US$ 160 mill.
The investment made by REC to acquire 20% of the shares in MSE totals approx. US$ 40 million. The initial shareholding of 20% is obtained through a combination of share purchase and share subscription. Under the agreement between REC and the current shareholders of MSE, REC can increase its shareholding to a majority position through options that can be exercised over the next 3 years. The specific terms and conditions in any subsequent transactions are dependent on the future performance of MSE.
"Our investment in Mainstream Energy is both a reflection of the increasing importance of the US market and our ambition to take a more active role in building robust and scalable market channels as a basis for further growth", says Erik Thorsen, President and CEO of REC.
REC Solar, established in 1997 in California, has grown on the strength of its professional sales-and-installation teams and strong marketing partnerships to become one of the largest PV system integrators of solar electric systems to homeowners and businesses in the United States. Currently operating in a dozen locations in California, Colorado, New Jersey, Hawaii and Oregon, REC Solar is expanding throughout the US.
AEE Solar Inc. is one of the largest distributors of renewable energy systems and equipment in the US. Headquartered in Northern California with sales offices in Southern California, Arizona, Utah, Colorado, and Canada, AEE Solar is a full-service distributor, offering a comprehensive range of solar products and services. AEE Solar offers extensive customer service and technical support.
The US market for PV systems has experienced significant growth over the last years with California taking a leading role with close to 60% of the total US market. Incentive systems and renewable portfolio standards, both at federal and state level, combined with increasingly more competitive PV systems, are expected to result in continued market growth in the US.
The US market in general, and Southern California in particular, are also believed to be amongst the first markets where PV systems are going to be able to compete at purely commercial terms, without subsidies.
"The investment by the REC Group brings not only capital to accelerate our expansion nationwide, but also deep insight and experience in the entire PV value chain which we hope to leverage to provide additional value to our customers and manufacturing partners alike", says Timothy Ball, Chairman of Mainstream Energy.
Proximity to the customers and insight into local conditions, including tariff schemes and regulations for installations, are key to provide cost efficient solution. MSE's leading market position, in particular in California, and the competencies and capabilities in design and installation of PV systems provides a robust platform for future growth. REC will provide added visibility in module supply and future cost position. Together, REC and MSE will pursue new product development opportunities and develop innovative solutions aligned with customer requirements.
REC is uniquely positioned as one of the most integrated company in the solar energy industry. REC Silicon and REC Wafer are the world's largest producers of polysilicon and wafers for solar applications. REC Solar produces solar cells and solar modules and engage in project development activities in selected segments of the PV market. REC Group had revenues in 2007 of NOK 6,642 million and an operating profit of NOK 2,588 million. Please also see www.recgroup.com
About Mainstream Energy
Mainstream Energy is a renewable energy company investing capital and expertise into developing products, projects and businesses that have the potential to help make solar-generated electricity a significant contributor to the total energy supply. Please also see www.mainstreamenergy.com, www.recsolar.com
For more information, please contact;
John Andersen, Jr. EVP & Group COO, + 47 90 17 40 80
Jon Andre Løkke, SVP & Investor Relation Officer, +47 90 74 49 49