Enerdatics data reveals that the country has already witnessed ~$1.7bn in private equity (PE) investments in the space YTD 2023, which is an ~8% increase compared to the total capital invested in distributed solar assets in 2022. The activity will be led by North American PE firms tapping into the rising demand for behind-the-metre systems, which is driven by efforts to lower electricity bills and the availability of innovative programs to fund consumers’ capital expenditures on the installations. The Solar Energy Industries Association (SEIA) recently noted that the country’s residential solar segment has witnessed a 30% y/y surge in installations in Q1 2023 and is on track to add 36 GW of new capacity over the next five years, growing at an average annual rate of 6%. As a result, developers and service providers are rushing to raise equity capital to expand their portfolios, to avoid tapping the costly debt market. Meanwhile, transferability provisions related to tax credits introduced in the IRA are enabling investors to improve the returns on their investments in this high growth market.
Recent Deal: CleanCapital, a US-based owner and operator of distributed solar and battery storage systems, secured a commitment of up to $500 million from Manulife Investment Management. The raised capital will be deployed to fund the development of its pipeline throughout the country, as well as expand its partnerships in emerging markets. The company currently has over 230 projects across 27 US states, totalling 450 MW, while also holding ~40 MW in construction and ~1.4 GW under development. The current investment follows Manulife ‘s initial $300mn investment in the company back in Apr’21.
Other significant deals: Nexamp recently secured ~400mn from US Bancorp Impact Finance and Mitsubishi UFJ Finance Group to expand its community solar portfolio across the country. Other major equity investments include RPower’s $400mn capital raise from I Squared Capital, Electriq Power’s $300mn equity infusion from a consortium of investors and Solops’s $200mn fundraise from Denham Capital.
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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