Arena Renewables targeting Illinois, Maryland to anchor its new partnership with CleanCapital

Arena Renewables is targeting Illinois and Maryland to anchor its new development partnership with CleanCapital because they are de-risked markets for community solar development, said the company’s CEO Matthew Kozey in an interview with NPM.

Arena and CleanCapital announced the solar development partnership this month that will develop “grid-critical assets” in the U.S., beginning with Illinois and Maryland, but will include other markets. CleanCapital will provide debt and equity instruments to help finance the buildout of the projects while Arena will develop them.

CleanCapital will eventually own and operate some of the projects long-term according to the company’s initial announcement, but Kozey said those terms are still being worked on between the two companies.

“We're thrilled to partner with CleanCapital --- they're an industry leader. They understand the development life cycle as well as the value of the projects that we're developing," Kozey said. “This deal came together because of a mutual understanding of the value of the Illinois and Maryland markets and a recognition of the skill the Arena team has in developing these projects and the importance of flexible capital to help scale our business."

Illinois and Maryland are the first markets that Arena is entering based on the “de-risk” factor Kozey said they offer with existing community solar programs.

Illinois Adjustable Block Program, a state-administered solar energy program that offers incentives for certain solar projects, is a tool Arena can utilize in that state, and Maryland’s large available solar capacity offers significant development possibilities. Low risk programs, good bill-credit rates and capacity availability were key factors in selecting these two markets, added Kozey.

Maryland for instance made its community solar pilot program permanent in May 2023 and a year later passed the Brighter Tomorrow Act offering additional state incentives for solar development.

“We are focusing on markets that share a few key characteristics: first that they're de-risked, as much as possible from a policy perspective. This means there is established offtake like a community solar program,” Kozey said. “The second area we're focusing on is that there is either no megawatt capacity cap, or a very high ceiling on what the market can be.”

The company is focusing on these two states right now but expects to add more markets in the future.

“We're looking at markets that have an existing program, existing offtake and lots of room to run,” Kozey said, adding that he expects the partnership to have projects ready for monetization later this year and into 1Q25.

In addition to new solar markets, Kozey said Arena is also exploring hybrid and standalone storage projects in the future.

Arena has built a pipeline of more than 500 MW of assets, inclusive of the projects under development in the CleanCapital partnership.

Industry experience

Kozey and Geoff Johnson, who is president and chief development officer at Arena Renewables, launched the company in July 2023 after careers at Cypress Creek Renewables, a leading utility-scale and distributed solar and storage company.

In his role on Cypress’ policy and strategy team, Kozey worked on market development to identify where existing community solar markets could improve and, in regions without community solar, what it would take to establish programs.

“I did a lot of legislative lobbying, worked with coalitions and did regulatory lobbying as well, but on the front end of that I worked with Geoff --- he was the Head of Distributed Generation at Cypress. He and I talked a lot about what markets to enter and why,” Kozey said. “One of the reasons we founded Arena was to move quickly and execute a very focused approach, selecting markets that were de-risked from a policy perspective.”

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

NPM US (New Project Media) is a leading data, intelligence and events company dedicated to providing origination led coverage of the renewable energy market for the development, finance, advisory & corporate community.