- Large-scale solar installer REC Solar, majority-owned by Duke Energy, purchased large-scale solar installer Stellar Energy from solar energy services distributor Soligent. The price was undisclosed. Stellar has 60 MW of operating solar capacity at 62 commercial, agricultural, and government sites and 28 MW for which it provides operations and maintenance (O&M).
- The purchase brings REC Solar’s portfolio to 200 MW of operating projects and 200 MW for which it provides O&M. That scale should, according to Forbes reporter Ucilla Wang, allow REC Solar and Duke to compete with commercial solar sector leader SolarCity.
- Both REC Solar and SolarCity offer third party owned financing for commercial-scale projects with no upfront payment and no ownership responsibilities to hosts of installations on their roofs or property.
This acquisition, like that of REC Solar by Duke in February, is part of a trend toward utilities adding distributed energy services to their capabilities. NextEra’s purchase of Smart Energy Capital and NRG Energy’s buys of Verengo Solar NE, Pure Energies, and Roof Diagnostics are other examples.
REC Solar CEO Al Bucknam believes the trend is driven by the scheduled drop in the federal investment tax credit (ITC) for solar from 30% to 10% at the end of 2016.
“While that will tighten economics, the lower rate is likely to make more capital available, at lower cost, because there are more investors that could absorb 10% than could absorb 30%," he told Utility Dive in February.
Bucknam’s assertion about the Duke acquisition, that solar companies will need “scale and reach,” applies to this deal as well. The added scale will allow REC Solar to cover the entire U.S. market, to procure effectively, and to develop more standardized, lower cost construction processes.
Soligent is expected to use the cash infusion from the Stellar Energy sale to widen its activities to other solar-related services.