NRG YieldCo will invest up to $150 million into NRG Home Solar’s Residential Solar portfolio, one of the first times a YeildCo will be used to purchase a residential solar portfolio in the U.S. The arrangement will allow NRG to more quickly monetize its residential solar leases, and free up more cash to invest in future residential solar projects while opening up solar project investment opportunities to more people in the U.S.
Other companies have created YieldCo’s like SunEdison or SunPower and First Solar teamed up to create a YieldCo, but their efforts are fussed on using bond-like investments to allow people and investors to invest in large-scale solar projects. This NRG offering will focus on residential solar instead.
“With the completion of this partnership between the companies, we initiate a new phase in the growth strategy of the NRG Home business unit and NRG Yield,” said David Crane, Chief Executive Officer of NRG and NRG Yield’s Chairman and Chief Executive Officer. “This strategic financial partnership, coupled with the growing strength of NRG Home’s residential solar platform, provides us even more confidence in our strategy and growth targets both for the residential solar business and for the NRG Yield portfolio at large.”
Under the agreement through the NRG subsidiaries, NRG YieldCo and NRG Home Solar, the parent company will periodically monetize its residential leases through NRG Yield. Through the agreement NRG will retain some ownership of the portfolio, the company said. It will also provide the subsidiary with cash.
The partnership invested in two of NRG Home Solar’s portfolios. They include its existing, roughly 17 megawatt residential solar portfolio of over 2,200 leases across 9 states. The average term of those leased systems in its portfolio is approximately 17 years, NRG said. The company also is putting up its in-development pipeline of 48 megawatts of residential projects (6,000 to 7,000 projects). Those projects will have a 20 year lease. NRG Yield anticipated that investors in the YieldCo offering will see a return of 7.5 percent on their investment.Tweet