GE Energy Financial Services has teamed up with Plutonic Power PCC-T, a B.C.-based renewable power firm, to buy three solar farm projects in Southwestern Ontario owned by solar-panel maker First Solar FSLR-Q.
The $60-million deal follows a spate of announcements in recent months that has seen other huge players such as South Korea's Samsung Electronics Co. Ltd. and Germany's Siemens AG, along with many smaller companies, set up shop in the province as renewable energy developers or manufacturers.
This is partly the result of Ontario's Green Energy Act, which pays high prices for renewable power and provides incentives to build such equipment in the province.
The GE/Plutonic solar farms, which First Solar has had in the works since before the Green Energy Act went into effect in 2009, have most of their permits in place, and construction is expected to get under way this summer. Together, they will generate a total of about 50 megawatts of power enough for about 6,000 homes.
This marks the first time either GE Energy or Plutonic has ventured into the renewable business in Ontario, and marks Plutonic's first solar project.
The two companies are already partners in two other power ventures the 200 MW Toba Montrose run-of-river hydro power project in south-central British Columbia and the 140 MW Dokie wind farm in the northeastern part of the province.
GE is putting about $55-million into the new Ontario venture, and Plutonic about $6-million.
Bill Cabel, an analyst at Jacob Securities Inc. in Toronto, said the deal makes sense, given Ontario's attractive renewable energy market, Plutonic's desire to expand geographically, and GE's stated intention to deploy more capital in this sector.
"It is just more evidence that the environment for developing renewable power in Ontario is very positive," he said.
Donald McInnes, Plutonic's chief executive officer, said his company and GE Energy like the potential in Ontario because "it is the biggest market in the country... and it is arguably the largest growth opportunity in the country at the same time."
The company hopes to be a "growing player" in the Ontario marketplace. But the expansion of the renewable sector in the province still faces some problems, including a need to renew the transmission infrastructure, he said.
Despite such obstacles, there may be opportunities for further investment. "There are a lot of undercapitalized small early-stage companies that will probably need help, and hopefully Plutonic can be a company that fills that role," Mr. McInnes said.
Plutonic is happy to continue helping GE Energy manage its investments in Canada, Mr. McInnes said, but it hopes to eventually be large enough to "do things on our own."
GE's energy finance arm has $6-billion US in renewable energy assets in 14 countries. Many of its projects are wind farms, but it wants to expand sharply in the solar sector.
Mr. McInnes said Plutonic and GE will be relying on First Solar's continued involvement as the operator of the three Ontario wind farms, because of its expertise in making solar panels, and building and maintaining solar installations.
First Solar earlier partnered with Enbridge Inc. to build a large 80 MW solar farm near Sarnia, Ont., that is now pumping power into the Ontario grid.