• Acquisitions, financing and repowering older assets driving growth plan
• Bullish on microgrids as customers veer towards BTM power

REC Power is expanding beyond solar into a diversified distributed generation (DG) platform through new acquisitions, repowering older assets and developing, owning and operating utility-scale solar, storage, fuel cells, microgrids and gensets in 26 states and counting.

The expansion was reflected in the company’s rebrand from REC Solar to REC Power this past June, as well as its July acquisition of a 68 MW portfolio of operating assets from Adapture Renewables in July.

“The reason behind our name change is twofold,” said REC Power CEO Robb Jetty in an interview with NPM. “One, it reflects the actual operating fleet that we own which is not just a solar company anymore. Two, it reflects where we think the industry of DG power is really going and that’s something that we think is the most exciting about the future of REC Power.”

According to Jetty, the independent power producer (IPP) owns more than 410 MW across the country which includes the Adapture portfolio, 70 operating Bloom fuel cells comprised of 43 MWac in northern California and three heat and power (CHP) natural gas gensets.

REC Power focuses on owning and operating projects within specific channels and across a variety of technologies within those channels.

When it comes to origination, Jetty said the company typically targets behind-the-meter (BTM) projects 2 MW or larger that serve on-site load, generally built on rooftops, canopies, and sometimes ground mount adjacent to existing load.

While REC Power has a history of originating big-box retail projects, Jetty said that segment of the market is no longer a key focus for them.

The company is still focused on other areas of the C&I and MUSH markets, Jetty explained, which is bolstered by strategic partnerships with regional EPC’s and developers originating PPA’s with customers.

“We have partnerships with a number of companies looking to take projects to NTP (notice to proceed),” Jetty said. “We’ll support them in the areas where they might have gaps in their business, and we’ll see the projects through to COD then own and operate them.”

Financing and acquiring third-party projects are also a key focus for the company.

“We bought in excess of 100 MW in the last year of operating assets,” Jetty said, highlighting a 30 MW repower in Texas the company is in the midst of working on.

“There’s a lot of interest in buying older assets, fixing them up and looking to extend contracts or use those locations to add additional technologies to the sites and provide different future potential offtake opportunities like batteries and fuel cells if they’re traditionally solar,” Jetty said.

A smaller segment in the company’s strategy is greenfield development of projects that typically range between 5-to-50 MW.

“We really do not participate in community solar with regards to greenfield development,” Jetty said. “It’s a very saturated part of the market with a number of businesses that really focus on those types of projects. We stay away from it intentionally. While we may finance and own-and-operate those kinds of projects that we source from either strategic partnerships or traditional M&A—we don’t originate them from scratch. We’re more focused on what you would consider small utility-scale projects that have some kind of long-term offtake, whether it’s with utilities, directly or through customers with VPPAs (Virtual Power Purchase Agreements).”

Jetty said that microgrids is where he sees an “enormous amount of opportunity.”

“We think microgrids are finally going to see their day in the sun where a lot of commercial industrial customers are going to rapidly accelerate their interest in generating their own power because the cost to get more power on site is just too prohibitive from their local utility and quite frankly, it’s just takes too long. That’s a huge growth opportunity that we see and we’re looking to support these types of customers going forward.”

Market strategy

Unlike community solar developers that are focused on specific states, REC Power is more flexible when it comes to its geographic footprint, evidenced by its portfolio spanning 26 states.

“We’re essentially geographically agnostic—so we have an incredibly varied operating fleet,” Jetty said. “At this point for us, it’s less about the location and more about the economics for projects and the value that they generate.”

“We own a very large fleet in Georgia, and we continue to see a lot of opportunity there and Colorado as well,” Jetty said.

Jetty identified California and Georgia as dominate markets, along with New York and parts of New England.

“The traditional behind-the-meter market continues to be strong in California,” Jetty said. “We see some of our own organic origination coming directly with customers in California. We see continued activity through our partnerships whereby they’re originating those kinds of project opportunities, so that aspect of the market continues to be strong.”

“I think a lot of companies that have been in community solar and have grown up with community solar in other parts of the country are trying to look at California through that specific lens and they want a community solar program to look just like some of the other markets that they’ve been successful in, so long as it doesn’t, they’re kind of throwing up their hands and are unwilling to invest in the market,” Jetty said. “I just think that that’s just the wrong way to think about what’s always been one of the biggest, if not the biggest solar markets in the US.”

ArcLight Capital Partners closed its acquisition of Duke Energy’s commercial distributed generation portfolio in October 2023, which included at the time REC Solar’s operating assets, pipeline and O&M business as well as fuel cell projects managed by Bloom Energy.

When making acquisitions or sponsor equity, REC Power sometimes draws on equity investment from ArcLight or partners with Tier 1 banks for tax equity and debt financing, but much of the development capital is internally generated at REC, Jetty said.

“We’re a profitable business as it stands today and we’re able to recycle that money back into bringing new projects online. It’s a pretty strong differentiator that we have in the marketplace versus a lot of our competitors,” Jetty said.

Texas Repower

Jetty sees a growing opportunity to acquire and repower aging projects, highlighting a 30 MW portfolio of three projects the IPP is currently repowering in Texas.

The three projects were developed and built by an IPP that no longer exists, which Jetty declined to disclose, and the new owner of the projects, who acquired them in bankruptcy, was no longer interested in owning them.

Some of the equipment had begun to degrade over time and the projects “just needed some greater care to be brought back,” Jetty said.

The projects are all past their ITC recapture period, having already claimed federal investment tax credits.

Jetty highlighted IRS rules that allow projects beyond the ITC recapture period to qualify for new federal tax credits if owners make a required level of new investment.

“So, these projects in Texas are getting all brand-new custom-made inverters because the older inverters were starting to fail, as well as a portion of the modules replaced with new modules and some of the trackers refurbished as well,” Jetty said. “They still have over a decade left on their PPA’s, so it makes economic sense for us to make the investment in these projects and continue to operate them for a longer period.”

While the Adapture portfolio was not acquired with the intention of repowering, Jetty said it could be something considered down the road.