Infrastructure Fund JLC Buys Up Solar Developer Greenskies

Another community and commercial solar developer goes to an
infrastructure fund, with the Monday announcement that U.S.-based
JLC Infrastructure has purchased Connecticut’s Greenskies Renewable
Energy. 

The benefits afforded by the JLC acquisition are threefold,
according to Greenskies vice president of marketing Jeff Hintzke:
the fund offers lower cost of capital, readily available capital
and experience in municipal infrastructure markets where Greenskies
sees growth opportunities.

“A large infrastructure fund like this … they have deep
pockets,” said Hintzke. 

The acquisition comes as further confirmation of a
growing trend
of infrastructure funds investing in solar. 
 

“Infrastructure funds generally tend to have lower cost of
capital,” said Michelle Davis, a senior solar analyst at Wood
Mackenzie Power & Renewables. “This acquisition from
Greenskies into JLC is a further evolution of the trend of
commercial solar into more patient capital.” 

Greenskies will now be known as Greenskies Clean Energy,
indicating a widened focus. That’s because customers have started
expecting broader product offerings, Hintzke said.

“Instead of just a solar PPA … they’re looking at storage
and resiliency, particularly in California, and how do they
participate in wholesale markets and energy markets where there is
additional revenue to be derived,” he said.

Greenskies differentiates itself from other C&I developers
by owning and operating the projects it develops long-term, Hintzke
said. That’s becoming increasingly common, said Davis, because it
allows C&I developers to take more margin from projects by
minimizing transaction costs.   

Hintzke said long-term ownership indicates to customers that
Greenskies has “vested interest” in solid construction and
impeccable project operation because the company is the one
receiving revenues. Greenskies also performs operation and
maintenance services for third-party solar owners.

Greenskies’ latest acquisition comes just two years after
Clean Focus Yield, a clean energy asset management firm, bought
Greenskies in December 2017. Clean Focus Yield will continue to
exist in some form, said Hintzke, as the group continues to execute
on a small number of mid-development projects. Neo Solar Power
Corp., the Taiwanese solar cell and module manufacturer that owns
Clean Focus Yield, will sell out its ownership over time and other
projects will be rolled into JLC along with Greenskies.  

Davis suggested the two acquisitions likely offered Greenskies
financial advantages.

“Greenskies probably got a bit of a boost financially from
shifting into more asset management and then also having a parent
company that could provide them with investment capital when Clean
Focus Yield acquired them,” she said. “Now that they are owned
by an infrastructure fund, they have that security plus the cheaper
cost of capital that an infrastructure fund typically provides in
contrast to other sources of capital.” 

Under its new owner, Greenskies plans to grow the 350 megawatts
of solar it already has in operation. Looking ahead, Greenskies is
eyeing non-traditional C&I offtakers, including small
businesses and manufacturers, and expansion among national
retailers. The company already has operating projects with big
purchasers such as Target, Walmart and Amazon. 

Hintzke said Greenskies’ 2019 installations were approximately
flat with 2018, when the company installed 48 megawatts of
commercial solar according to WoodMac tracking, but the company
foresees growth in 2020 with 100 megawatts expected for completion
within 18 months and a 500-megawatt pipeline.

Source: FS – GreenTech Media
Infrastructure Fund JLC Buys Up Solar Developer Greenskies