Solar energy companies First Solar, SunPower plan dividend-producing partnership; shares jump

Solar power companies First Solar and SunPower said Monday they plan to combine some of their assets into an investment vehicle that is intended to provide steady dividends.

The companies said they are in "advanced negotiations" to create the investment vehicle, a "yieldco." Both First Solar Inc. and SunPower Corp. would contribute some assets to the partnership, and the companies said they intend to file for an initial public offering.

Yieldcos aim to distribute most of the proceeds from generating or delivering electricity to shareholders through dividends. They try to increase their dividends by buying more power projects.

More renewable energy companies are creating yieldcos because some investors see them as safer investments than, for example, the volatile stocks of solar panel makers.

Shares of Tempe, Arizona-based First Solar jumped $5.54, or 11 percent, to $55.18 in aftermarket trading and stock of San Jose, California-based SunPower advanced $3.75, or 13.5 percent, to $31.55.