Grid giant ABB throws down $1B for Power-One and its solar gear

Even though solar panel makers are struggling mightily, the solar panel market is expected to grow steadily. That’s why Swiss grid giant ABB (s ABB) announced on Monday morning that it will spend around $1 billion to buy one of the leaders in the solar inverter industry, publicly-traded, Power-One (s PWER). Solar inverters convert power from solar panels into usable power.

ABB is spending $6.35 a share for Power-One. Power-One has 3,300 employees, and in 2012 produced $120 million in earnings, with $1 billion in sales. Bloomberg reports that the deal is 7.7 times Power-One’s earnings (EBITDA), which is lower than the average price of 8.5 times earnings that has been paid over the past three years for clean power companies.

There was a record-breaking 3.3 gigawatts worth of solar panels — or 16 million individual solar panels — installed in the U.S. in 2012, making solar power the fastest-growing energy source domestically. Another record year is expected in 2013.

Solar panel makers are struggling because the price of solar panels is so cheap right now, and that has led to an oversupply of panels in the market. There will be more consolidation and bankruptcy this year for solar panel makers.

In recent years the solar inverter market has also been developing new technology, and have begun to introduce micro inverters, or smaller inverters coupled with each solar panel. Traditional solar inverters are larger are there have commonly been one per solar panel rooftop installation. ABB has been aggressively acquiring technology across the power grid sector, and has also been investing in clean power tech through its venture arm, over the past two years.