US distributed generation (DG) solar systems owner and operator Spruce Power has made its largest inorganic growth investment so far, the purchase of about 22,500 residential solar contracts under which customers buy clean electricity generated by rooftop solar home power systems.
The portfolio was acquired from an unnamed US private equity firm. Spruce Power paid USD 35 million (EUR 32.5m) and assumed USD 125 million of non-recourse project debt, a press release said on Friday.
“[The acquisition] grows our ownership of rooftop solar assets and contracts by about 44% overnight to more than 72,000 systems,” Spruce Power’s CEO Christian Fong said.
The associated solar systems are spread across 10 states, expanding Spruce Power’s footprint to two new markets -- Washington and Oregon, and strengthening its position in California, Colorado, Florida, Nevada, Texas, Delaware, Maryland, and South Carolina.
The acquired portfolio has an average remaining contract life of nearly 15 years. It is expected to generate over USD 21 million in customer billings in 2023 and about USD 23 million in average annual billings over the next five years, with EBITDA and contribution to Spruce’s annual Cash Available for Debt Service (CAFD) seen to exceed USD 18 million annually for the period.
The residential solar platforms were originated by US homebuilder Lennar Corporation (NYSE:LEN) and its legacy residential solar platform, SunStreet, between 2013 and 2020.
Spruce Power is an owner and operator of distributed solar energy assets across the US, offering subscription-based services to help homeowners own and maintain rooftop solar and battery storage. The company is owned by US fleet electrification and energy efficiency solutions provider XL Fleet Corp (NYSE:XL).
(USD 1 = EUR 0.928)
Choose your newsletter by Renewables Now. Join for free!