Cypress Creek Renewables to acquire solar developer FLS Energy
Solar power developer Cypress Creek Renewables of California has signed an agreement to acquire solar developer FLS Energy of North Carolina.
The combination will join FLS’ portfolio of 350 MW of operating projects and 600 MW of projects in development with Cypress Creek’s portfolio of 735 MW of projects in operation or under construction and 4 GW in various stages of planning.
- The deal will make Cypress Creek the second-largest utility-scale developer in the nation, GTM reports, and strengthen its engineering, procurement and construction operations. FLS will operate as a wholly owned subsidiary of Cypress Creek and retain its Asheville office.
The uncertainty and political risks associated with the investment tax credit (ITC) makes for a bumpy ride for solar power developers.
Before it was reinstated at the end of 2015, solar investors were expecting the ITC to fall off in 2016. That prompted utilities to over procure to meet the renewable portfolio standards, Colin Smith, a GTM Research solar analyst, told Greentech Media.
Utilities moved their procurement forward, but when the ITC was extended developers were left with a slower deal flow. That means that some developers are now scrambling to fill up a dwindling project pipeline, and GTM reports more consolidation is expected.
The ITC now runs through 2018 when it ramps down incrementally through 2021 and then remains fixed at 10% starting in 2022.
As consolidation continues, the Charlotte Business Journal says to expect many deals to involve North Carolina companies.
While the state's second-leading solar market in the U.S. has produced a group of healthy local installers, the journal reports many are reaching a point where they need to scale up rapidly to compete outside of the state, making partnerships appealing.
With the FLS deal, Cypress Creek will become the second-largest utility-scale solar developer in the U.S., according to GTM, behind First Solar. Though the company is not yet three years old, a spokesperson told the outlet it is still "actively trying to grow.”
- Greentech Media Utility-Scale Solar M&A Activity Picks Up as US Developers Scramble to Build Bigger Pipelines
- Charlotte Business Journal Large N.C. solar developer sells to California-based renewable company
- Press release Cypress Creek Renewables to Acquire FLS Energy
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