SMA Solar Technology AG is acquiring a 27% stake in Tigo Energy, Inc. in the context of a capital increase. SMA is also obtaining exclusive rights for worldwide sales of the smart module technology TS4 Retrofit. The strategic partnership with Tigo Energy gives SMA access to the fast growing market of module-level power electronics (MLPE) with an annual market volume estimated at approximately EUR 700 million. In addition, SMA will deploy the new solution for expanding its data-based business models.
Tigo Energy developed the patented TS4 smart module technology to increase the functionality of solar modules.
"SMA is the only manufacturer of inverters worldwide that has a complete product portfolio for all solar applications and regions. In order to upgrade its portfolio in the area of MLPE, SMA entered into a strategic partnership with Tigo Energy, Inc. Around the world, over a billion solar modules have been installed that cannot be individually monitored. With this stake in Tigo Energy, we can for the first time give all solar modules intelligence—in both existing and new plants. For SMA, this information has great strategic relevance for data-based business models. Our customers benefit from the technically dovetailed solutions. We can thus provide the data obtained at module level in our Sunny portal for further assessment. What is more, our product portfolio now contains a technically superior solution that allows cost-effective performance optimization at module level. In this way, we can service the market even better than was previously the case," said Pierre-Pascal Urbon, CEO of SMA.
"The SMA participation is a confirmation of Tigo's high level of innovation and architecture. A key feature of our TS4 platform is that not every module needs to be equipped with an additional function," said Zvi Alon, CEO of Tigo Energy. "The customer pays only for the function that he actually needs for the maximum energy yield. Compared to other solutions on the market, our products allow greater efficiency and therefore a better energy yield at the lowest incremental cost. The solar power professional can easily adjust the photovoltaic system on site. We will now work together with SMA to integrate the communication link of our solution into the SMA products. This will make installation even easier in the future."
The transaction envisages that SMA will acquire a 27% stake in Tigo Energy in the context of a USD 20 million capital increase. SMA receives a seat on the Tigo Energy Board of Directors and exclusive sales rights to the TS4 Retrofit product platform for 30 months. Both companies will cooperate in the areas of research, sales and service.
The SMA Managing Board anticipates that the transaction will impact positively from as early as the second half of 2016. However, at the current moment in time, it is not possible to assess precisely the impact of the transaction on SMA sales and profits. For this reason, the SMA Managing Board confirms its sales and profits guidance for the 2016 fiscal year. For 2016, the SMA Managing Board estimates sales between EUR 950 million and EUR 1,050 million and a considerable upturn in profits to between EUR 80 million to EUR 120 million.