Altus Power America, a Greenwich, Conn., based solar developer, increased its investment war chest by more than $200 million with investments from Wall Street giants Goldman Sachs, Global Atlantic Financial Group and FS Investments (which is sub-advised by GSO Capital Partners, Blackstone’s credit business).
Altus has a history of attracting large investments from its partners. In 2014, Altus raised $150 million from RGS Energy.
According to the company, Altus will use the money to continue funding its distributed-energy pipeline. The company focuses primarily on the commercial and industrial segment of the solar industry. It has 32 completed projects (including the ESPN headquarters in Bristol, Conn.) and 11 currently under construction.
While Wall Street has shown recent reluctance to invest in solar (several high-profile bankruptcies, including SunEdison and Solyndra, and recent struggles by companies like SunPower and SolarCity, have made Wall Street firms skittish), Altus Power contends that all it takes to earn investment from the big banks is to have a proven record of success.
Early in solar’s development, Wall Street jumped into the space — particularly in the utility segment — without a full understanding of either the technology or the project-development timeline. Expecting unrealistic quarterly dividends from companies whose projects, while solid, may have taken longer to be constructed than the banks anticipated, the investment firms retreated.
But recently, as more companies have explained to Wall Street bankers about the long-term potential of solar as an investment, some big investment banks — like Goldman Sachs — are starting to come back to the segment. And developers who can demonstrate success, like Altus, will be the beneficiaries.