Coast Energy CEO discusses solar project acquisition plans over next several years

Coast Energy plans to use the bulk of its recent USD 400m investment commitment from the Crosstimbers Capital Group to acquire solar projects over the next several years, said Blair Herbert, Founder and CEO, in an interview with NPM.

The California-based developer currently has operating assets and late-stage development projects in 15 states including California, Hawaii, Oregon, New Jersey and New York.

“We’re always assessing new states where there may be new [favorable] policy,” Herbert said. “We want to make sure that we are focused on the right markets.”

The developer set out to be a commercial and industrial (C&I) behind-the-meter solar provider in 2021 but expanded their vision with the advent of community solar. Most of their assets are comprised of C&I, carports, or ground-mount facilities—but they are looking for opportunities to host or take part in community solar programs.

Their smallest project is a 500 kWh microgrid for the state of Hawaii, and the largest is a 10 MW ground mount feed-in-tariff project in Rhode Island.

“We’re comfortable in that space and feel like our skill set and our capital resources pair up well with those types of projects," Herbert said.

In addition to developing and constructing projects, Coast Energy aims to own projects long-term.

“We are a long-term owner operator. There’s nothing wrong with flipping projects, but we don’t flip projects. We acquire with the interest of owning and operating long-term.”

In Hawaii, Coast Energy has developed thousands of residential and commercial projects awarded through Hawaiian Electric.

“You’re seeing huge growth in that market from a microgrid or solar + storage perspective where residents want to be less reliant on the grid and a little more independent from a power perspective,” Herbert said.

In New York, projects have been sited predominately on landfills and part of a feed-in-tariff program.

“It’s a segment of the market that we found very attractive and where we have some relationships within that sector,” Herbert said.

In February, the developer made headlines after they acquired a late-stage development project from i.on Renewables in the Town of Brookhaven on Long Island, New York. The 8.6 MW project will span 35 acres of limited use, capped landfill with more than 16,000 solar panels. The solar facility will feed into the PSEG-LI utility grid. Coast Energy will be the long-term owners and operators of the project. The Town of Brookhaven is the largest town by area in the state of New York, and second largest by population.

The project is preparing for Notice to Proceed (NTP) after some supply chain issues, however all the equipment has been ordered and they are just waiting for approval on a few more applications from the New York State Department of Environmental Conservation (DEC).

“We’re preparing to mobilize and start construction,” Herbert said. “It will be placed in service sometime early next year.”

i.on Renewables oversaw early interconnection work, the initial DEC approval process, worked with the Town of Brookhaven to secure a site lease and worked through the process with the town to apply for a Feed-In-Tariff award.

Herbert said they are also partnering with i.on Renewables on other projects in the state.

The developer is also expanding their footprint in Oregon, where they’re in the process of acquiring two late-stage community solar projects in Oregon. Each project is a little over 3 MW, Herbert said.

“We like the program a lot and are actively looking at additional projects and trying to grow to scale in that market,” Herbert said.

Coast Energy is well established on the capital financing side, offering developers and contractors secured financing for interconnection or procurement deposits for any early-to-mid-stage development expenses.

“It’s been really helpful,” Herbert said. “We want to acquire more projects, and it helps us do that. It also helps early-to-mid-stage developers--especially ones developing a number of projects whose capital could get spread thin.”

In 2022, the company received a growth investment of USD 400m from Crosstimbers Capital Group, a Houston-based private equity firm, to accelerate their project development across the country. Coast Energy has tried to be formulaic with the deployment of that capital to reduce expenses.

“Every dollar that we spend on structuring costs and legal expenses hurts our ability to do more projects,” said Tim Popp, Coast Energy’s Head of Operations. “So, we try to take it from a perspective where we view development partners as our true partners and find ways to grow and be successful together.”

Popp said they know solar, finance, PPAs, and community solar really well, but what we don’t know really well is all the individual regional local markets.

“We find a great partnership is where we can team up with someone who knows a local market really well. We acknowledge their market [expertise] and can provide capital that is efficient and priced well, while also being easy to work with to help them grow their market share.”

“We’re not just a group that is trying to buy every project from every party. We’re really structing some long-term partnerships where we help each other out and grow together.”

*This story was originally published exclusively for NPM subscribers last month.


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