Solaria gets stuck on building Trillo with ghost cost triggered

Solaria, along with the rest of the energy companies, has experienced a very volatile 2021. Something that is reflected above all in listed companies. But the setbacks do not end. The call to be one of the most important solar projects in Europe, located in Trillo (Castilla-La Mancha), will have more delay than expected, both for its construction, license approval and connection. Something that will be reflected in the costs due to the current inflationary situation.

In the middle of the poisonous summer, Solaria was about to launch its solar plant in Trillo. Already in the spring, when the project was released in more detail, the idea was launched that by the end of 2021 the 626 MW it will have would be connected to the grid. Although little by little the delays have been arriving. The latest update has been given with the presentation of results: it is expected that it will be in April when the installation is connected to the network. Although there is still a long way to go.

As explained in a meeting with analysts by the company's CEO, Arturo Díaz-Tejeiro, there are currently 500 MW under construction, and the third part of the construction project is expected to start in December. With regard to authorizations, one of the conflicting points, the head of Solaria has highlighted that these 500 MW are "fully authorized" and with all environmental permits. Regarding what is missing, optimism is present.

Díaz-Tejeiro has ensured that in a few days they will have final authorization for the remaining capacity and, thus, before the end of the year they will begin to build the so-called last plate island. He assumes that from a legal perspective it seems impossible that there will be any kind of problem with the final authorization.

However, there is a possibility that the plant will come online separately. In other words, there could be a first connection to the grid of the 500 MW that are already under construction and for which there is a permit, and later the 126 MW that still do not have permits would be connected. Something, logically, that would modify the roadmap set by Solaria. An issue, they point out from Barclays, that can negatively affect shareholder confidence.

SOLAR PLANTS AND COSTS

Another factor closely linked to this delay has to do with the costs of solar panels. As they have explained from the company, most of the material has been provisioned for a long time. This means that when the purchases were made, the solar modules were around $0.20. This situation has taken a big turn in recent times.

Díaz-Tejeiro explains that it is not due to a lack of suppliers, since the solar components industry has important 'players' in all countries. He simply assumes that costs have gone up and that in the next few months the modules will be around $0.26 at best. However, it has not yet made estimates of the impact it will have on the company's costs.

GOOD RESULTS

Regarding the figures presented this week, Solaria obtained a net profit of 37.5 million euros in the first nine months of the year, which represents an increase of 50% compared to compared to the same period of the previous year, the company reported.

In the period from January to September, the net turnover of the renewables group amounted to 70.753 million euros, 73% more than in the first nine months of the previous year. The company highlighted that this good performance was due to the increase in production due to the connection of new photovoltaic plants, in line with its business plan.

Solaria's gross operating result (Ebitda) at the end of September stood at 70.017 million euros, with growth of 86%. The operating profit (Ebit) was 55.874 million euros, 115%.

In line with its strategic plan, the group has continued to increase its installed capacity and has a total of 5,179 megawatts (MW) installed, under construction or in public information, which is equivalent to its target of the end of 2024 and a 30% of its goal of 18 gigawatts (GW) in 2030.