Siemens Acquisition Values Solar Thermal Tech at $418M

Last Updated Oct 15, 2009 3:48 PM EDT

Solel, a solar thermal company that has mainly been active in Europe, has a new owner: Siemens, a German conglomerate most recognized in cleantech for its wind turbines.

The $418 million acquisition marks the first time that a major solar thermal player has been picked up by another company, and offers some clues about what the technology is worth that may be useful if a competitor like Brightsource Energy or eSolar holds an initial public offering.

All of these solar thermal companies operate on the same basic idea of concentrating the sun's energy with mirrors onto a contained fluid, which produces enough steam to run a generator. The technology works best at large scale, so utilities and factory owners are the most common clients.

The bidding for Solel took place over a period of months, and it also received offers from Housing and Construction of Israel, Alstom and Areva. Although all the companies involved began by talking about just making a significant investment, Siemens appears to have decided it wants to own the technology outright.

So what does this mean for the industry? Bloomberg offers some numbers for Solel: the company has 500 employees and made $90 million in sales in the first six months of this year.

By contrast, Brightsource reported only 120 full-time employees in March of this year, while eSolar appears to have around the same number. However, both companies plan on outsourcing some aspects of plant construction, so they won't need as many employees.

In terms of projects, Brightsource, which seems to be the most likely solar thermal company to have an IPO, outweighs Solel significantly with agreements to develop about five gigawatts of power. Its largest proposed development will be 1,310 megawatts.

Solel, for its part, previously agreed to build a 553MW plant in California and another 150MW plant in Spain, but hasn't made any other agreements public. The company also does installations for others.

Based on Solel's acquisition price, a Brightsource IPO would probably come in at well over a billion dollars, especially with the stock markets proving their optimism for cleantech with A123 Systems' recent IPO.

There's also the distinct possibility that the Solel acquisition serve to spur Brightsource toward an IPO.

Both Brightsource and Solel are spiritual successors to Luz, a now-defunct company that built small solar thermal plants in the 1970s. But with Siemens providing not-inconsiderable engineering services to Solel, the company will pick up an edge over its competitors that it didn't possess before.