Earlier this week Principal Solar, a company vying to become the first solar distributed utility in the U.S., got a nice Christmas present in the form of a new partnership with Carlyle Capital Markets Inc. (CCMI). The latter has agreed to serve as Principal’s financial consultant as the solar energy company pursues its strategy of acquiring solar projects in 2014. The company will sell the solar power produced to customers like data centers and perhaps even residents.
The company is taking a unique approach to becoming a distributed power generator, much like NRG or Green Mountain Power have. They purchase the generating assets then sell the power generated to customers, whether it be another utility or end-consumers like homeowners and businesses in deregulated markets where the customer can choose where their energy comes from. However, NRG and Green Mountain Power offer a mix of energy sources. Principal Solar (as implied by the name) will do so using only solar.
In 2014 Principal plans to invest between $50 million and $100 million in solar projects with support from Carlyle, according to the Dallas Business Journal. The company plans to make purchases across the country, but currently none in Texas where the company is based, but wholesale electric prices are low.
“As we move our business activities into high gear and prepare for the acquisition of many solar projects, CCMI will provide the financial services necessary to build the capital structure required to fuel significant growth,” explained Principal Solar CEO Michael Gorton. "PSI is building its business at a time when the bankability of solar has never been greater. Unprecedented opportunities now exist in solar for more traditional investors.
One of the reasons Principal Solar chose CCMI is because is has previous experience with alternative energy projects, Principal said. The financial services company said it began engaging in energy efficiency projects more than 20 years ago and then expanding into consulting on other energy efficiency projects.
“We are very pleased to be working with Principal Solar as we have a very strong commitment to advancing the use of renewable energy in this country,” said Barry Friedman, president of CCMI. “The development of renewable energy projects is gaining momentum in the U.S. and solar is one of the driving forces. Additionally, investors are strongly supporting socially responsible investments such as solar, which we believe present the opportunity to advance PSI’s portfolio of solar projects and provide additional value to their shareholders.”
As Principal starts buying solar projects it could help inspire other companies to become solar utilities. And as more companies get into to supporting solar projects it can help give consumers and businesses more choice in where they get their electricity from, even if they can’t put solar panels on their rooftops.Tweet