CleanCapital, a financial technology company, is looking to invest up to $300 million in operating solar power projects.
The company, which assembles portfolios of distributed solar assets that individuals and institutions can invest in, serves as a source of capital for developers who want to exit projects. The approach is modeled on the yieldco business strategy, in which developers set up publicly-traded holding companies to buy and operate completed projects.
CleanCapital plans to make new acquisitions through a warehouse fund it set up with Generate Capital Inc. Generate Capital is putting in an undisclosed sum that can be scaled up to $300 million, CleanCapital Chairman Jon Powers said in an email. "This capital enables us to acquire projects and compile larger portfolios so we can bring larger sources of capital to the distributed generation market," Powers said.
CleanCapital already has a $21 million debt and equity offering for an 8-MW portfolio of 15 operating solar projects in seven states. The offering received funding from John Hancock Life Insurance Co., as well as 30 individuals who put in an average of $87,000, Powers said.
"We believe it is important to provide opportunity to a range of investors to attract more capital to the clean energy market," Powers said.
A second $31 million offering comprises a 13.8-MW portfolio of 15 solar projects that sell electricity through power purchase agreements with Pacific Gas and Electric Co., a subsidiary of PG&E Corp. Both offerings have target equity returns between 11% and 13%.
Generate Capital President Jigar Shah said CleanCapital is filling in a funding gap in the distributed energy market. The firm, which uses an online platform to identify, screen and manage projects for investors, offers a "streamlined approach [that] is attractive as it facilitates access to safe and secure opportunities to invest in these low-risk, cash flowing assets," Shah said in a news release.