BrightSource Energy cancels IPO

On April 11, the firm behind the technology for the Ivanpah solar thermal project decided to withdraw its initial public offering (IPO).

BrightSource Energy was scheduled to go public last week, but late on Wednesday night the firm announced that it had withdrawn its registration with the Securities and Exchange Commission. The firm cited “adverse market conditions” as the motivation for the withdrawal.

“While we received significant interest from potential investors, the continued market and economic volatility are not optimal conditions for an IPO,” said John Woolard, President and CEO of BrightSource Energy.

“As a company, we’ve consistently made decisions in the best interest of our shareholders, employees and customers, and we will continue to do so. Fortunately, we’re in a strong financial position and have the support of world-class investors and partners.”

BrightSource Energy's Solar Development Center. Credit: BrightSource Energy

The company specializes in concentrating solar power, a utility-scale application of solar thermal energy that uses the sun’s heat energy (rather than fossil fuels) to power a generator.

BrightSource has received much publicity for its 392 MW Ivanpah Solar Electric Generating System in California, which, when completed in 2013, will be the world’s largest solar thermal installation. The project will generate enough electricity to power about 140,000 homes. BrightSource will sell the electricity to Pacific Gas & Electric Company and Southern California Edison.

The firm received a $1.6 billion loan guarantee from the Department of Energy. The company argues that the Ivanpah project is not under threat. According to Dow Jones, the lead investor in the project NRG Energy confirmed that the Ivanpah installation is going well and the company is in good shape.

“With our pipeline of U.S. contracts and our flagship Ivanpah project, we have established a leading position in the domestic solar thermal energy space,” added Woolard. “We will continue to execute on our business plan to grow domestically and expand internationally to meet the growing demand for our technology.”

But some industry analysts see this move as another sign that the predicted flat year for solar investment will play out, with little investor confidence in solar stocks.

“It’s a really disappointing statement of investor sentiment into solar,” said Sheeraz Haji, chief executive of consulting firm The Cleantech Group told Dow Jones.

No doubt Solyndra’s high-profile bankruptcy, along with the string of other firms downsizing or filing for bankruptcy, have contributed to the lack of enthusiasm amongst investors. Haji noted that investors may have difficulty discerning between companies with viable technologies and those who face a more precarious future.

“I fear that this is a bit of groupthink that’s going to hurt a number of good companies in the public markets,” he said.

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