Cypress Creek to Cut EPC Business, Expand in Competitive Markets

The new leaders at solar developer Cypress Creeks Renewables
have finalized the strategic shift they were hired to execute.

Going forward, the company will continue to develop in the
Carolinas, but will focus more effort on competitive electricity
markets including Texas, PJM and New York, where the company can
sell to more than just utility offtakers. Cypress Creek will also
eliminate its in-house division for engineering, procurement and
construction once it has completed ongoing projects, and will
contract with external EPCs from now on. 

The chart-topping utility-scale developer, based in North
Carolina, has had a turbulent year. It
laid off
roughly 20 percent of its workforce in January, GTM
reported. In June, the company
brought in new leadership
from Point Reyes Energy Partners, a
solar advisory and development company. Sarah Slusser, Kim Oster
and Rebecca Cranna now serve as CEO, interim chief strategy officer
and interim chief operating officer.

Slusser promised in an interview after her appointment to
instill
“a more disciplined approach to development”
focused on
value creation and sustainable growth. On Thursday, she delivered
that strategy.

“With you, we will take this company from its roots of rapid
expansion in the Carolinas to a more dynamic national solar company
focused on sustainable growth powered by innovative projects and
products, including solar and storage,” Slusser wrote in an
letter to staff Thursday.

The internal EPC business grew up during the company’s early
days as a regional player in the Carolinas. As business activities
spread into farther flung geographies, running EPC in-house made
less sense, Slusser said.

“As we go across the country, we can rely on the external EPC
market, which is a robust market for providing EPC services to
developers,” Slusser said in a Thursday interview. She declined
to comment on how many employees will be affected by the
decision. 

Former CEO Matthew McGovern in January described EPC as one of
the company’s
“core value creation centers,”
alongside development and
project finance.

EPC leader Mike Belikoff will leave the company after managing
the draw-down of his business unit, Slusser said. Belikoff, the
former chief operating officer at Strata Solar, had joined Cypress
as part of the January restructuring.

Several finance leaders will also leave the company, including
Chief Structured Finance Officer Patrick McConnell, Managing
Director for Project Finance David Riester and Chief Capital
Markets Officer Brad Bauer.

Cassidy DeLine, formerly director of project finance, has
stepped up to lead the project finance team as vice president.

The company’s Go Forward Strategy does not call for selling off
more projects, for now. Cypress Creek cashed out of 580 megawatts
ahead of the January layoffs, but has some 2.5 gigawatts remaining
in it operating portfolio, with more executed contracts coming
online this year. The company has developed more than 3.7 gigawatts
to date.

“We monetize when we see fit, when we see value to that,”
Slusser said. “That’s always going to be in the mix.”

North Carolina will remain in the mix too, but it will form a
smaller share of business as the company ramps up utility-scale
efforts in deregulated markets. The freedom to make bilateral
contracts with corporate offtakers, as well as municipalities and
community solar subscribers, opens up new opportunities compared to
the more closed environment of regulated markets.

Cypress Creek utilized those opportunities with a
70 megawatt deal with Starbucks
to power 360 stores in Texas,
announced in April. That type of deal, Slusser noted, would be
harder to structure in North Carolina’s regulatory environment.

The company will also pursue distributed generation projects in
New York and Illinois.

Source: FS – GreenTech Media
Cypress Creek to Cut EPC Business, Expand in Competitive Markets