Standard Solar CEO discusses how Brookfield deal will improve supply chain and support continued M&A activity
Brookfield Renewables (BEP) recent acquisition of Standard Solar is going to significantly enhance its abilities to both develop and acquire community solar projects, said Standard Solar’s CEO Scott Wiater in an interview with NPM.
BEP announced on September 29th that it closed the deal to acquire Standard Solar for up to USD 700m. The company will be BEP’s key DG developer moving forward.
In the short-term, Wiater says the plan is to staff up considerably and look into opening additional offices on the West Coast and the Northeast. Although Standard Solar plans to largely stick to DG projects, Wiater expects the firm’s average project size to tick up to the 25 MW range. Standard Solar may also partner with other Brookfield companies involved in both DG and utility-scale projects on procurement. BEP’s US renewable developer presence increased significant this year following its January acquisition of Urban Grid and the recent USD 1bn deal it struck to acquire Scout Clean Energy.
With Brookfield’s support, Wiater is expecting to get better supply agreements with manufacturers and to continue to engage with the M&A market on DG solar portfolios. Already he says there are a number of large portfolios of DG projects on the market right now and that Standard Solar is shortlisted on “many of them.” Finally, he says he expects Standard Solar to “do a lot more with storage,” which the firm has already dipped its toes in, over the next several years. Standard Solar has acquired multiple portfolios in Maine, Oregon, and Massachusetts over the past year, amongst other deals.
One of the main things Wiater says will dictate how quickly Standard Solar is able to scale up over the next 12 to 18 months is how quickly it will be able to convert NTP-ready projects into COD-ready projects. Right now, he estimates that cycle at being around a year, still longer from the pre-COVID cycle of 8 months.
“The way to get around that is to simply do more,” Wiater said.
Wiater says the deal was roughly a year in the making and was kicked off when he approached former owners Énergir about putting the firm on the market.
Énergir engaged Marathon and RBC and ran a formal process which Wiater says resulted in “a lot of interested parties” before arriving at Brookfield. He says he and Standard Solar management, which will remain in place as the company continues to operate independently, are “pleased” with the results and that the plan going forward is to grow the business “significantly” in a number of key areas.
When Brookfield announced the acquisition of Standard Solar last week, it reported a price tag of USD 540m with the potential to invest an additional USD 160m to “support growth initiatives.” However, Wiater says the actual enterprise value of the company was valued at USD 1bn.
Wiater says the plan going forward is for Brookfield to invest the capital required for another 200 MW to be added to Standard Solar’s pipeline this year and growing into “almost double that” over the next five years.
“The markets are good and we wanted to grow to the next level at a faster pace,” Wiater said. “Energir’s focus is on their core business, so they agreed it was a good time to exit.”
*This story was originally published exclusively for NPM subscribers last month.
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