July 11, 2008

FPL Taps California Company to Build 2 Solar Plants

By Allison Ross, The Palm Beach Post, Fla.

Jul. 10--Here comes the SunPower.

Florida Power & Light Co.'s announcement Thursday that it has chosen SunPower Corp. of San Jose, Calif., to build the largest photovoltaic solar power plant in the country in DeSoto County heralds "a new chapter" in the solar industry in America and the Sunshine State, SunPower said.

SunPower Corp. (Nasdaq: SPWR), a manufacturer of solar panels and systems, will install a 25-megawatt photovoltaic power plant north of Arcadia to be completed next year. It will also build a 10-megawatt photovoltaic plant at the Kennedy Space Center, completing it in 2010.

Currently, the largest photovoltaic solar power system in the United States is a 14-megawatt plant built by SunPower at Nellis Air Force Base in Nevada.

"This is a new chapter for the solar industry," said Julie Blunden, vice president of public policy and corporate communications at SunPower.

Eric Silagy, Florida Power & Light Co. vice president and chief development officer, said adding the plants is a "natural extension" of the company's work with renewable energy and that solar power has a "very bright" future in Florida.

"The technology is getting better, and prices are going down," he said.

Juno Beach-based Florida Power & Light, a subsidiary of FPL Group (NYSE: FPL), announced plans for the solar projects June 25. FPL Group, through its FPL Energy division, is the nation's leader in wind-energy generation, and owns and operates the country's largest solar-thermal project in California's Mojave Desert.

With the cost of conventional energy sources like gas rising and the cost of manufacturing and installing photovoltaic solar systems decreasing, businesses such as SunPower are becoming more cost-competitive, said George Kotzias, a New York-based analyst with Calyon Securities of Paris.

SunPower will be increasingly able to move into utility-scale work in addition to residential and commercial-scale jobs in the U.S., he said.

A supplier has not yet been named for a 75-megawatt solar project that FPL also announced June 25. That project would be located on 500 acres in Martin County.

The Martin Next Generation Solar Energy Center is planned for the Martin Power Plant south of State Road 710 west of Indiantown. The solar-thermal project, to be connected to FPL's natural gas-powered plant there, could supply enough power for up to 11,000 homes.

The three projects will cost about $688 million and will offset more than 3 million tons of carbon dioxide, FPL's Silagy said.

SunPower's shares rose $8.83, or more than 14 percent, Thursday to $70.06 -- well off the 52-week high of more than $164 recorded in early November.

Shares in FPL Group rose $1.01, or 1.5 percent, Thursday to $68.07.

Experts say the FPL projects come at a good time for SunPower. Shares fell recently after speculation that solar energy subsidies in Spain might be cut.

"Spain's been one of the best subsidy programs for solar energy," Kotzias said. "Deals of this magnitude will help the industry."


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