Dealwatch: Investors target US solar-storage

By BEN COOK

  • Billions of dollars of investment is driving the growth of US solar-storage projects
  • TPG Rise Climate and Generate Capital among biggest investors in recent weeks
  • Energy security fears and low cost solar could mean ‘record decade’ for solar-storage

Concerns about energy security, along with the “affordability” of solar energy, have led to more than $1 billion being invested in US solar-storage companies and projects in recent weeks.

One of the biggest recent announcements was confirmation of TPG Rise Climate’s $750 million growth equity investment in Oregon-headquartered Intersect Power last week. Intersect said the deal included participation from existing investors Climate Adaptive Infrastructure and Trilantic Energy Partners North America.

The driving forces behind the Intersect deal were made clear by the company’s CEO Sheldon Kimber, who, in addition to emphasising the need to accelerate the decarbonisation of the economy, said the deal would “build American energy security”. 

US Navy shores up Pearl Harbor energy supplies 

A desire to strengthen the US’ energy security was also cited as a key factor when Massachusetts-headquartered Ameresco announced last month that it would be partnering with energy infrastructure developer Bright Canyon Energy to build a combined solar and battery system at the Joint Base Pearl Harbor-Hickam West Loch Annex in Hawaii.

Ameresco said the project – which will include the installation of a 42 MW photovoltaic solar array and a 42 MW/168 MWh (four-hour duration) lithium-ion battery storage system – was being developed n support of a US Department of Defense “long-term energy security initiative”.

Meanwhile, Capt. Randall E. Harmeyer, Joint Base Pearl Harbor-Hickam public works officer said: “The Navy is excited to see this joint Kūpono Solar/Hawaiian Electric project move forward for our community’s benefit. This enables us to put 131 acres of underutilized land to long-term, sustainable use for Hawaii at a time when the cost and reliability of worldwide energy supplies is of great concern and reflects the Navy’s core commitment to energy security and resiliency for America.”

Affordability of solar driving deals

In addition to energy security considerations, the affordability of solar power is also proving to be a major incentive for investors.

In another major deal announced last month, it was confirmed that sustainable infrastructure investor Generate Capital had made a $500 million investment in US solar and storage developer Pine Gate Renewables. It includes a $200 million equity investment and an additional $300 million commitment to a “long-term asset partnership for solar project financing”. The investment will provide Pine Gate with additional capital to fund the construction and development of projects.

Enhancing energy security was cited as one of the motivations for making the investment, but, in addition, the affordability of solar energy was one of the major justifications for completing the deal. Ben Catt, chief executive of Pine Gate, commented: “Generate is a collaborative, experienced partner and shares Pine Gates’ long-term vision of driving the energy transition and improving energy security by providing solar energy and battery storage to local communities across the country.” Scott Jacobs, chief executive and co-founder of Generate, added: “Solar is the world’s most affordable source of energy today and is a significant opportunity for Generate as utilities adapt to the strong demand from customers for more renewable resources.”

‘Record-breaking decade’ for solar-storage expected 

The low cost of solar energy will drive a substantial amount of investment in solar-storage projects in the coming years. At the end of May, energy transition-focused investor ECP acquired the development business of US solar and energy storage developer Borrego, a deal that includes a project pipeline of more than 8.4 GW of solar and 6.4 GW/25 GWh of energy storage. Commenting on the deal, Mike Hall, chief executive officer of Borrego said the sale would enable Borrego to “capitalize on what will be a record-breaking decade for solar and storage deployment in the United States”.

Elsewhere, Leeward Renewable Energy (LRE) last week closed what it hopes will be the first of a significant number of solar and storage financings when it secured $58.5 million in construction financing and tax equity commitments for its 100MW Rabbitbrush Solar Facility – which will also include a 20MW / 50MWh battery energy storage system (BESS) – in Kern County, California. Chris Loehr, Leeward Renewable Energy chief financial officer, said: “This is the first of many LRE solar and BESS financings to come as we build out the contracted pipeline in 2022 and 2023.”

Meanwhile, last month, New York governor Kathy Hochul announced awards for 22 large-scale solar and energy storage projects that will deliver clean energy to power over 620,000 New York homes for at least 20 years. “These projects will spur over $2.7 billion in private investment and create over 3,000 short and long-term jobs across the state,” a statement said.

Trend set to continue

Last week there was announcement concerning another solar-storage project in Hawaii with news that solar energy storage company Holu Hou Energy – a subsidiary of 5G wireless systems company Borqs Technologies – had signed a deal with developers and property owners to provide storage systems for nine solar plus storage projects in the state of Hawaii valued at $49.8 million. Work on the projects will begin in the third quarter of this year. Eight of the nine projects are on the island of Oahu, with the other on Hawaii island.

Energy security concerns are certain to escalate in the US in the coming months, and therefore it’s likely we will see a continuation of this trend of new investment in solar-storage projects. At present, the low cost of solar energy is proving to be a big draw for investors and we can expect the proliferation of solar-storage projects to continue in the near future.

Image: (clockwise from left): Mike Hall (Borrego); Sheldon Kimber (Intersect Power); Chris Loehr (Leeward Renewable Energy); Ben Catt (Pine Gate Renewables); Scott Jacobs (Generate Capital).

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