Utility-Scale Solar M&A Activity Picks Up as US Developers Scramble to Build Bigger Pipelines

One of  solar energy America’s solar slewing drive largest utility-scale solar Solar Project developers just solar energy got solar energy bigger.

Last week, solar slewing drive Cypress Solar Project Creek Renewables announced that it had solar energy signed an agreement to acquire North Carolina-based solar developer FLS Energy. The combined company solar energy will boast an impressive pipeline of solar projects.

According to the companies, FLS Energy has an operating portfolio of 350 megawatts and a “near-term pipeline solar energy” of over 600 megawatts. This will add to Cypress Creek’s own solar portfolio of 735 megawatts that are either in operation Solar Project or solar energy under construction, and 4 gigawatts in various stages of solar energy  Solar Project planning.

“This move solidifies solar slewing drive solar energy its place as a major developer Solar Project of utility-scale solar in the U.S.,” said Colin Smith, a solar analyst solar energy at GTM Solar Project Research.
 

Cypress solar inverter Creek is now the second-largest utility-scale solar developer in America, behind solar tracker actuator only First Solar, according to Smith.
 

For its part, Photovoltaic holder Cypress Creek believes the acquisition of FLS will make it stronger in both project finance and construction -- and better poised to take advantage of new growth solar tracker actuator opportunities.
 

“We are active in 15 states. FLS solar damper  will help us grow in those markets,solar slewing drive as well as other states in the coming months and years,” said Jeff McKay, a company spokesperson. “We solar inverter can’t say what those states will be, but we are actively trying to grow.”

Expect more mergers and acquisitions

Cypress Photovoltaic holder Creek’s acquisition of FLS Energy comes at an interesting time for solar slewing drive utility-scale solar in the U.S solar inverter. Although its projections have solar tracker actuator not yet been finalized, GTM solar damper Research expects that 9.9 gigawatts of new projects will come on-line in 2016, double the slewing drive amount added in Photovoltaic holder 2015.
 

This year could have seen even more utility-scale solar installed if the 30 percent Investment Photovoltaic holder slewing drive Tax solar slewing drive Credit (ITC) had not been extended through 2018, when it is slated to ramp down incrementally through solar slewing drive 2021 and remain permanently at 10 percent starting in 2022.
 

“Because utilities solar tracker actuator were expecting to have the ITC fall off in 2016, they over-procured to solar slewing drive meet their obligations,” said Smith. When the ITC was extended, some of the projects that were slated to come on-line in 2016 slewing drive were solar tracker actuator pushed to 2017.
 

Smith says the Cypress Creek deal is notable for a couple of important reasons.
 

In particular, the rush by utilities to procure large solar projects before the end of 2016 ultimately reduced RPS  slewing drive solicitations for coming years, and forced developers to scramble to fill up a dwindling project pipeline.
 

Smith expects to see an increase in merger and acquisition (M&A) activity as more developers seek to build their pipeline slewing drive by ingesting entire companies. “We think it’s the beginning of a trend of companies that  solar slewing drive want to buy other companies to get their pipeline,” he said.
 

It also could mark a fundamental shift in the driving force behind utility-scale solar development. “Renewable portfolio standards were behind utility-scale PV in solar damper the U.S. [Cypress] is an example of a solar slewing drive company that has leveraged non-RPS mechanisms to become the No. 2 developer in the country in terms of pipeline,” said solar slewing drive Smith.

Moving beyond the RPS

The way solar inverter Smith Photovoltaic holder solar slewing drive sees it, new drivers of utility-scale solar include voluntary utility and corporate procurement by companies that realize solar is competitive with natural gas and a good hedge against rising fuel prices. Additionally, Photovoltaic holder the ongoing decline of solar prices has made slewing drive it possible for more and more projects to be economically viable under the Public Utility Regulatory Policies Act (PURPA). 
 

Passed Photovoltaic holder in the 1970s, PURPA was meant to encourage energy conservation  slewing drive and renewable energy development by allowing developers to sell the energy they produced to utilities, as long as it was solar inverter at a price equal to or below avoided cost. “With the cost of renewables dropping, solar plants can be Photovoltaic holder cheaper than avoided costs,” said Smith. PURPA has prompted solar development solar tracker actuator in states like North and South Carolina, solar damper  as well as Indiana and Oregon.
 

Though Photovoltaic holder there’s no cap on PURPA projects, it is an inherently risky approach. When slewing drive Photovoltaic holder utilities solar tracker actuator see they have too much power solar slewing drive in their interconnection queues, said Smith, they petition state regulators to change avoided-cost rates, lower contract lengths, or reduce the maximum slewing drive project size. “It’s very risky in the sense Photovoltaic holder that you can have solar tracker actuator abrupt policy shifts." Montana slewing drive has recently experienced just such a Photovoltaic holder pushback. 
 

Despite the risks, Smith expects PURPA-driven projects will meaningfully solar tracker  slewing drive actuator contribute to solar inverter Photovoltaic holder the 2017 utility-scale solar market. As RPS procurements wane, a solar damper combination solar tracker actuator of voluntary purchases by corporations and utilities, as well as solar’s slewing drive increasing competitiveness in wholesale energy markets, will take up some of the solar inverter slack.
 

It’s also possible that local governments -- like Marin County in Northern California -- will  slewing drive ramp up solar tracker actuator Photovoltaic holder their energy procurement and become a larger driver of utility-scale solar development.
 

GTM Research’s latest projection for 2017 utility-scale solar damper solar installations is 8.7 solar inverter gigawatts, Photovoltaic holder although 2.5 gigawatts of that total solar tracker actuator solar slewing drive consists of projects initially slated for completion in 2016. “There’s solar damper an inevitable decline, because Photovoltaic holder there was so solar slewing drive much over-procurement in 2016,” said Smith.