UPDATED: Inverter maker Power-One has bought venture-backed Fat Spaniel Technologies, adding to a list of renewable energy acquisitions this year.
Power-One said Fat Spaniel’s software for monitoring and analyzing the performances of solar generation projects, from residential solar electric systems to larger commercial installations, is a good fit for the company as it plots for expansion in the U.S. and other markets. The publicly traded Power One, based in Camarillo, Calif., said Wednesday it’s bought most of the Fat Spaniel assets and will merge the software developer’s operation into its own.
Neither company disclosed the acquisition price, so it’s not clear whether the sale is a nice payback for Fat Spaniel’s investors, which included Element Partners, Chrysalix Energy, Applied Ventures, Ignition Partners and PCG Clean Energy and Technology Fund (managed by PCG Asset Management).
Fat Spaniel, a Silicon Valley company founded in 2003, makes money by selling monitoring services to solar energy system owners. It rode the wave of the solar market boom and boasted on its website that it had managed over 3,800 sites, including the San Francisco International Airport, in 23 countries.
UPDATE: David Lincoln, managing partner at Element Partners, told us the deal was a good one for Fat Spaniel because it’s had some tough times growing its business. The pressure to drive down project development costs in the last two years has made developers more stingy about spending money on monitoring services, he said. Fat Spaniel’s services can be more attractive if they are packaged with equipment and services from a large company such as Power-One.
Power-One wasn’t the only suitor. Companies that showed interest in Fat Spaniel included makers of microinverters and other power electronics, as well as those in the monitoring business, Lincoln said. He declined to discuss the profits the investors were able to make from selling Fat Spaniel. But he added, “Even though no one was writing home to their mothers about the outcome, every one was pleased that we were able to get the deal with Power-One.”
Fat Spaniel started off offering monitoring services to owners of solar electric systems at homes and businesses, and it talked about targeting the utility-scale power plant owners last year. For the utility market, Fat Spaniel also was looking at offering software to help developers design power plants. Last September, the company also announced new software that it said could detect and trouble-shoot operational problems and help power plant owners cut maintenance costs by up to 30 percent.
In many cases, solar power project owners have to collect performance data not just to ensure their solar panels are working as designed, but also to submit the information to government agencies in order to claim incentives.
The acquisition could be a good fit for Power-One, which rose to become the world’s No. 2 inverter maker earlier this year, according to IMS Research report on the second-quarter shipment. The market research firm ranked Power-One at No. 4 in 2009. Inverters are a must for any solar-panel systems because they convert the electricity from direct current to alternating current for feeding the grid or use on-site. How well inverters perform, then, plays a big role on the overall output of a solar energy field.
The deal also highlights how acquisitions are the favored form of exits for companies in the solar field. Just two weeks ago, solar panel maker Sharp said it would buy San Francisco-based project developer Recurrent Energy for $305 million. In July this year, First Solar bought project developer NextLight Renewable Power for $297 million.
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