Apricus Generation founder discusses new distributed solar and battery storage venture

Apricus Generation, a holding company announced this month, will focus on connecting developers of distributed solar and battery storage projects to institutional capital--a challenging feat for many developers, said the company's co-founder Gautam Chandra, in an interview with NPM.

Developers will also benefit from governance oversight from industry veterans who will work to scale their pipelines and overall business resulting in bigger payouts for the developer, according to Chandra.

This month, Apricus closed on an initial USD 28m Series A funding round with a total offering of USD 100m in process to close over the next few months.

The first order of business will be finding the right developers to partner with. Those developers will need to share similar philosophy.

The platform will be looking for developers with prudent financial management of their business and developers running a lean shop.

“There’s been developers out there that have been funded, got too aggressive spending money, and are now finding themselves in trouble,” Chandra said.

Chandra said they also want developers to have the philosophy of wanting to be part of a national asset owning IPP company. Some developers just want to develop and flip. While they can make decent money this way, they are seeking developers with a vision and the ambition to become a national player.

Developers should also have an established track record of solar experience with a pipeline of assets in development that they can bring into NTP, construction, and operations in the near term. Apricus executives are currently in advanced discussions with a couple developers.

Apricus will begin focusing on states with defined Renewable Portfolio Standards (RPS) and ones with community solar programs. Some of those states include New York, Illinois, California, Hawaii, Texas, and Massachusetts. Chandra said they are eyeing other emerging markets like Pennsylvania and Ohio.

Bridging The Gap

Developing good DG projects largely involve having roots in specific geographies and understanding local permitting, utility processes, knowing politicians, businesses, or landlords, Chandra said.

“They’re very good at creating these early-stage projects, but then to take them through construction and operations requires a lot of sophisticated financial skills,” Chandra said. “A lot of the smaller shops do not have the sophistication to put all that together. Many times, they end up selling the projects at the time it is close to being fully developed because they just do not have the ability to take it all the way.”

“Then I look at the institutional side—these large multi-billion-dollar institutions that have an insatiable appetite for these assets once they’re fully constructed and operating,” Chandra said. “Many of them tried to work with early-stage developers but that’s a tough game because they don’t have the people that are really required to work at the small-scale level.”

While today’s market is challenging for developers to raise equity capital, Chandra thinks there is still a very good market for project finance for projects that get to NTP.

“There’s a deep market for people who want to buy that project outright or they will help finance the construction and own a portion of the project once its constructed," Chandra said.

“I think because of our experience and because of our past successes we’re able to go and have investors basically trust their dollars with us knowing that we’re going to invest it prudently into the developers and build out the pipelines,” Chandra said.

Background

Apricus is Chandra’s fourth startup solar company since 2008—two of which have been sold to public companies with “good outcomes,” Chandra said.

WGL Holdings, launched in 2008 with one solar project and by 2016, the company had built a billion-dollar portfolio of solar assets across the country. According to Chandra, it was the largest portfolio of distributed solar assets up to that point. WGL and its solar business was sold in 2017 to Canadian gas company AltaGas.

The second startup was SmartPitch Ventures, a venture capital and private equity company focused on disruptive technologies with a particular focus on energy. The company formed in 2019, around the time they acquired controlling interest of two commercial solar developers—New Energy Equity and Impact Power Solutions. The two companies were scaled and sold to Allete Enterprises three years later in 2022.

“It was a great outcome for all of our investors,” Chandra said. “We learned in that process that if you have a national developer platform with the ability to actually own your own assets instead of selling them once they are developed, then you can create this developer/IPP model. When you can scale that, there is a lot of big institutional demand for those assets.”

In 2020, Chandra also launched SolaReit, a solar land financing company which he continues to act as Managing Director. SolaReit continues to grow rapidly. Last fall, the company received a USD 250m round of equity from AB CarVal.

*This story was originally published exclusively for NPM subscribers in April.

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