Enerdatics data suggests that ~10.6 GW of solar assets were acquired by private equity (PE)-backed firms in the US last year. Of the transacted capacity, ~86% represented projects under development. Enerdatics understands that despite macroeconomic headwinds such as supply chain bottlenecks and growing equipment costs, the surge in activity is driven by increasing attractiveness of solar projects in the country. This is partly due to the 30% investment tax credits and renewable energy incentives provided by the Inflation Reduction Act (IRA) until 2034. According to a recent analysis by the advisory firm Lazard, a utility-scale solar project that takes advantage of these incentives can yield an effective internal rate of return (IRR) of up to 17% (without the domestic content credit adder of 10%) and 22% (with the domestic content credit adder). PE firms are taking advantage of the market opportunity by investing in local developers and rapidly expanding their portfolios.
Recent deal: Encap Investments-backed Linea Energy has acquired a 490 MWdc solar project in Texas from Britain’s Horus Energy. Dubbed “Duffy”, the project is currently in the development stage. Specific details about the project and its construction timeline are not available. The acquisition marks Linea Energy’s entry into Texas. The company is EnCap’s seventh renewables portfolio investment and its first utility-scale venture since Triple Oak Power in 2020.
Other significant deals: TPG Rise-backed Matrix Renewables recently acquired a 4.6GW portfolio of utility-scale solar projects across the central US. Other major transactions include Renewco Power’s purchase of 1.5 GW from Beaufort Rosemary, NV Energy’s deal for 1 GW of assets from Primergy Solar and Cordelio Power’s acquisition of a 900 MW portfolio from SunEast Renewable.
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.
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