The environmental affect arm of funding administration and holding firm Power Corporation of Canada this week took full possession of U.S. neighborhood solar developer Nautilus Solar. 

The acquisition suits throughout the broader development of institutional traders dipping into solar, and the neighborhood solar house specifically. The buy additionally marks the primary U.S. play for Power Energy Corporation, the Power Corp. subsidiary that focuses its investments on firms with environmental affect. 

“The U.S. is a huge market. I like to say that it’s 10-to-one scale between the U.S. and Canada, it’s probably more than that in renewables,” mentioned Pierre-Olivier Perras, president of Power Energy Corp. “We looked at the U.S. market for awhile and felt the community solar space is where we wanted to be.”

Perras added that the “long, predictable cash flow” and “long-standing useful life of the assets” related with renewables jibes with the regular dividend objectives of Power Energy Corp. and its father or mother.   

Power Energy Corp. will add Nautilus to an current steady of unpolluted energy associated firms. It totally owns solar and wind developer Potentia, which largely focuses on the Canadian market, and has partial stakes in electrical bus and truck producer Lion Electric Company and LED lighting firm Lumenpulse. 

Though New Jersey-based Nautilus additionally acquires, develops, builds, funds and manages municipal, utility and enormous industrial solar initiatives, the neighborhood solar sector stays its focus. And as a result of that market requires native data and connections to herald and handle subscribers, Perras mentioned Nautilus offers a superb “entry point” into the U.S. market.

“You need a bit more agility to operate in the community solar space, you need to have a strong local understanding [and] the financing is a bit more difficult because you’re smaller-scale,” Perras informed Greentech Media. “But that comes with higher returns. We like that sector and we feel it’s the future to be closer to the client.”

Laura Stern, a co-CEO of Nautilus, mentioned the acquisition offers the 13-year-old developer readability for the long run and aggressive capital so it could actually deal with scaling. Its present pipeline is 50 to 100 megawatts per 12 months.  

“This transaction does bring competitive capital, it also brings benefits of being wholly-owned by such a well-capitalized company,” mentioned Stern. “We have the unusual perspective of having the benefit of a long-term ownership horizon.” 

The Nautilus acquisition rides a rising development of institutional capital scooping up neighborhood solar builders. In April, North American Infrastructure Fund bought developer Clean Energy Collective, National Grid purchased Minnesota-based Geronimo Energy in March, Global Infrastructure Partners acquired NRG (now Clearway Energy) in 2017 and Clean Focus Yield acquired Greenskies that very same 12 months.

Like Nautilus, Clean Energy Collective, Greenskies, Clearway and Geronimo dabble in different areas of solar, like industrial or utility-scale initiatives, in addition to neighborhood solar. But Michelle Davis, a senior solar analyst at Wood Mackenzie Power & Renewables, informed Greentech Media in April {that a} deal with neighborhood solar is turning into a financially-savvy choice.

“Community solar is the fastest-growing and often most lucrative opportunity for C&I developers,” mentioned Davis. 

This newest acquisition from “large capital providers who typically have more conservative views on the market” additional proves the rising pleasure round neighborhood solar throughout the bigger trade, mentioned MJ Shiao, director of company technique and enterprise improvement at neighborhood solar startup Arcadia Power. Arcadia is working with Nautilus on a project in Rhode Island.

“You have these large energy players that are looking for the next exciting thing … and choosing community solar because it truly has a lot of legs,” mentioned Shiao, who beforehand headed Americas analysis at Wood Mackenzie Power & Renewables.  

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