Distributed solar developer New Energy Equity acquired by US utility for US$166m


A solar array from New Energy Equity in Michigan. Image: New Energy Equity.

US utility Allete is acquiring Maryland-headquartered distributed solar developer and operator New Energy Equity for around US$165.5 million.

Specialising in PV plants from 1MW to 10MW and with a presence in 26 US states, New Energy Equity has to date completed more than 250 projects with a combined capacity of more than 310MW.

The developer also offers solar operations, maintenance and asset management services through its wholly owned subsidiary, Energy Support Services.

New Energy Equity last year closed 35 solar projects representing more than 80MW and generated adjusted EBITDA of around US$20 million.

The firm’s co-founder and CEO, Matthew Hankey, said the Allete deal will provide his company increased access to capital, adding: “With our combined experience, we can expand the reach of distributed generation solar and storage projects to provide more sustainable energy solutions for our communities, industry partners and customers.”

Headquartered in Minnesota, Allete owns utilities Minnesota Power and Superior Water, Light and Power as well as Allete Clean Energy, a wind developer and operator that has delivered build-transfer projects totalling about 1.7GW of renewables capacity.

Allete CEO Bethany Owen said New Energy Equity’s model of developing, financing and selling a large number of small projects annually complements Allete’s other businesses that typically focus on larger, utility-scale plants.

“New Energy Equity brings to Allete the expertise and experience to offer comprehensive solar solutions to customers, adding to our existing wind energy capabilities,” she said.

It is expected the acquisition will close in mid-April, with New Energy Equity’s team remaining in place.

Distributed PV deployment is set to accelerate in the US amid rising interest in community solar and on-site renewables. The US must deploy at least 103GW of distributed solar power and 137GW of distributed energy storage by 2030 to reach President Biden’s climate goals at the lowest cost, according to research published last year.

Recent deals have seen commercial and industrial (C&I) solar developer Altus Power partner with energy major Shell to offer distributed renewables and energy storage solutions, while balance of system solutions provider Shoals Technologies is collaborating with C&I PV project developer Luminace to pursue distributed renewables across the US.

Globally, a rise in distributed PV deployment was one of the success stories of the solar sector in 2021, according to research firm IHS Markit, which is forecasting that the segment will drive additional growth this year.

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