Renewable America CEO discusses potential capital raise with KeyBanc, weighs in on California market

Renewable America is working with KeyBanc Capital Markets on a potential capital raise to meet opportunities in California following the passage of Assembly Bill (AB) 2316.

Ardi Arian, president, and CEO of Renewable America told NPM that KeyBanc reached out in June 2023 with interest in an asset platform or equity partner.

“We have reached out to multiple investors and have a good pool interested in investing in our company,” he said, adding that the company has never gone out for a capital raise so far. “There is a lot of opportunity, especially through community solar. We see opportunities in the market and that this is a good time to get an equity partner on board.”

Since starting out in 2019, Renewable America has grown from five employees to almost 40 by the end of this year and has two divisions for development. The first is focused on greenfield where it assesses land suitable for development, reaches out to landowners, and invests into the early stage of development through the stage where it becomes financeable. The other division is focused on EPC, which began in 2022.

Right now, Renewable America has about 40 projects totaling 320 MW solar, and 680 MWh battery storage paired with solar. These are located strategically throughout California with the northernmost in Humboldt County and the southernmost in Los Angeles County.

Recently, Renewable America held a ribbon cutting for a new 1.5 MW project in Marin County, California, where Arian said it was met with local support due to the project’s low impact and that it allowed sheep grazing on the site.

“We are having another pipeline for a joint venture in Virginia, which is an earlier stage of development than the development in California,” Arian said.

The Virginia pipeline has about 10 projects totaling 45 MW of solar, though has no paired storage at the moment.

“We don’t see that being the case in Virginia or opening that up for the community solar market, but we are hoping to reach growth potential of 100 MW just in Virginia in the next one to two years,” he said.

Arian explained that because of the benefits from the Inflation Reduction Act (IRA), which limits some of those benefits to 5 MW for community solar projects, which is why Renewable America sticks to that scale.

“We want to make it work with this technology, but with more investing in the process itself,” he said, pointing to the differences in AC-coupled energy storage versus DC-coupled. “The majority of the market is AC-coupled or standalone.”

He said they intend to pursue more DC-coupled energy storage by working with the manufacturers directly.

“This is a bit more challenging since it is not the standard but opens up advantages for the development process and is more efficient,” he said.

Arian explained that DC is what solar panels generate and inverters convert that to AC, which needs a second transformer. Having a project be DC-coupled means the energy enters directly into the battery with less losses.

“It’s simpler with DC-coupled if it works,” he said. “The reason it is complicated is how you choose the equipment. We think we will have a better solution.”

The company secured USD 150m in long-term financing from Excelsior Energy Capital in March 2022 to develop solar-plus-storage distributed resources in California.

California community solar

When California’s AB 2316 passed in 2022, Arian remembered the excitement that followed in the market and the surprise that California was behind other states with established community solar programs.

“Community solar was not available here, but there were smaller programs with different utilities, but never a bigger market,” he said.

The excitement continued through 2023 and even up until March but dropped off when the California Public Utilities Commission (CPUC) presented its proposed decision on establishing the program.

“That proposed decision was a huge disappointment,” he said. “I would say it was a surprise that it didn’t head in the direction that most of the industry players were hoping for and that companies were investing in.”

The CPUC’s argument, he said, centered around the need to protect ratepayers.

AB 2316 had initially set the bar for a 20 GW community solar market and that 51% of electricity would go to low-income households.

Renewable America “is very much engaged” as a member of the Community Coalition Solar Association (CCSA) and Arian personally attended a hearing held by Senator Josh Becker in March where he and other emphasized that it “is important to not follow through with the proposed decision.”

At the time of the interview on April 18, Arian said that the CPUC removed the proposed decision vote from the agenda during its regular voting meeting.

“The first reaction of CCSA is this is hopefully something that will show a signal that the CPUC is going to make a change, but we don’t know if it will go into rewriting or be amended,” he said. “We are hoping to see something improve.”

The CPUC may revisit the proposed decision during its next meeting on May 9.

“The market needs to be created,” Arian said. “We need this industry to grow.”

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

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