Danish solar company Better Energy is expecting to improve its financial performance this year thanks in part to its transition from a project developer to an independent power producer (IPP).
The firm last year completed its long-term strategy of becoming an IPP and now has an ownership stake in 190MW of operational assets. In its annual report, the company said annual recurring revenues from the IPP model are higher than the short-term returns from the divestment of solar parks.
“Instead of focusing on developing and selling solar plants, we are now focusing on producing and selling green electricity. This is a crucial step we have taken,” said Rasmus Lildholdt Kjær, CEO of Better Energy.
The company said its “rapid transition” to an IPP was possible thanks to a mixture of financial partnerships as well as commercial agreements that have allowed it to construct subsidy-free solar projects that deliver energy to companies such as Google and food ingredients maker Chr. Hansen.
The “build-hold” strategy has also seen Better Energy enter into an agreement with Danish pension fund Industriens Pension, which will result in the development of approximately 1GW of new solar projects in Denmark and Poland that are expected to go online in the next two years.
Better Energy’s solar deployment in 2020 saw it complete 154MW of projects in Denmark, 60MW in Poland and 12MW in Sweden. As of the end of last year, the company had approximately 450MW of solar under construction and a pipeline of 6GW.
The divestment of solar projects helped Better Energy almost double its revenue last year to DKK1.07 billion (US$173 million), and operating profit soared to DKK149 million (US$24.2 million). With higher levels of activity in 2021, the company expects to post revenue of DKK1.3-1.6 billion this year.