INTERVIEW: CleanCapital CCO on firm's push for community solar and storage acquisitions
CleanCapital has acquired two operating Massachusetts community solar projects from EDF Renewables with a combined capacity of 12 MW, marking their fifth acquisition close this year.
The Boston-based company is supported by a USD 300m investment from Manulife Investment Management is now in the hunt for an additional USD 200m in debt financing to support its acquisition slate.
In an interview with NPM, CleanCapital’s newly promoted CCO Julia Bell would not comment on the latest capital raise but did discuss firm’s acquisition strategies moving ahead into next year.
CleanCapital is expected to target C&I scale solar and storage moving forward into 2022.
The two projects acquired in Massachusetts, both of which were constructed in 2014, push CleanCapital to USD 880m in cumulative acquisitions. Bell says the company has acquired or financed 250 MW of capacity comprising 160 projects in 19 states since its inception in 2015. The company has traditionally focused on what it defines as the “middle market” asset size, which ranges from 1 to 25 MW.
“The middle market of solar and energy storage is a critical piece of the energy transition and ripe for additional investment,” Bell said.
Bell said the team would “absolutely” be continuing to target community solar acquisitions like these two projects in Massachusetts moving into next year. While Bell says collaborating with a good developer is key, the most critical piece to consider when targeting community solar acquisitions is subscriber management.
“When acquiring any operating project, it is important to understand off-taker performance,” Bell said. “For community solar, we pay close attention to the default rate among existing subscribers. The trickiest part is after acquisition when we transfer existing subscribers over to our subscriber billing and maintenance system. We want to make that transition as painless as possible.”
With these two projects in Massachusetts, CleanCapital’s total footprint in the state now exceeds 50 MW. Bell says the firm’s focus on Massachusetts directly correlates to the state’s SMART incentive program, which attracted strong community solar development in the state.
“Massachusetts is a great example of how forward-thinking and consistent state policies attract investment,” Bell said.
With a strong footprint established in Massachusetts, Bell says the firm is now setting its eyes on other states that have robust community solar markets like New York and Illinois.
The firm has also closed deals in Maryland and Maine this year and announced a financing partnership with Stem, which the firm says will result in the development of up to 30 MW of new storage projects. Bell says that while solar will still be the primary focus of CleanCapital’s acquisition strategy moving forward into 2022, she expects storage to make up a growing portion of the firm’s focus.
“We are looking forward to increasing our acquisitions of high-quality middle market solar assets in 2022 and are actively pursuing energy storage deals,” Bell said. “We expect that storage will make up a small but significant portion of our portfolio by the end of the year.”*
*This story was originally published exclusively for NPM subscribers earlier this month.