Nautilus Solar CEO discusses private placement for community solar portfolio

Nautilus Solar Energy has secured a USD 202m institutional debt private placement transaction for a 186 MW portfolio of community solar assets.

“This is the first true institutional debt private placement transaction where the predominant portion of the portfolio backing the transaction is comprised of community solar assets,” said Jeffery Cheng, Nautilus CEO, in an interview with NPM.

Cheng said it was an intensive financing that involved the entire company and took a good part of the year to accomplish.

Historically, there’s been a smattering of community solar projects within larger financing portfolios, but none that were predominantly community solar, making this a novel approach to traditional investors, Cheng said. Community solar is now being recognized by institutional investors as a stable asset class going forward for this type of financing.

The transaction “breaks ground in a sense and says that this is a stable category and we’re really proud to be trailblazing in that regard,” Cheng said.

“This opens up a whole new avenue of institutional financing for Nautilus in the future,” Cheng said. “It really stabilizes the leadership of Nautilus within community solar. This is the type of financing that traditionally has been done with a more stable asset class or an asset class that has evolved to a certain level of stability."

The portfolio is comprised of 58 operating community solar assets across seven states, including Colorado, Maine, Minnesota, and New York, and comes with more than 17,000 residential and commercial subscribers.

National Bank Financial Inc. and RBC Capital Markets acted as advisor and joint lead placement agents for Nautilus on the private placement transaction. Greenberg Traurig, LLP acted as legal counsel for Nautilus, and Winston & Strawn LLP acted as legal counsel for the investors.

While Nautilus is active in most community solar enabling states, Cheng said they are following policy closely in several states and looking to move into the West and Midwest, including Illinois, New Mexico, and California, in a big way over the course of the next few years. They also intend to continue their expansion into several states that have recently expanded their programs, such as Minnesota and Maryland.

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


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