Goldman Sachs buys 204 MW of East Coast solar from SJI

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As power companies shed solar projects, asset managers are quickly buying them up. Last week Goldman Sachs Asset Management (GSAM) acquired a portfolio of 76 commercial and industrial (C&I) solar projects on 143 sites in four East Coast states from Marina Energy, a subsidiary of South Jersey Industries (SJI).

GSAM is paying $350 million in cash for the portfolio, which includes 204 MW of projects in Maryland, New Jersey, Massachusetts and Vermont. SJI will receive $63 million in cash within the next week, with the balance coming over “the next several months” as individual projects satisfy closing conditions, which is expected for the entire portfolio by the end of the year.

According to SJI these solar arrays are providing power to schools, hospitals and businesses. Marina plans to lease back some of these projects to preserve the Investment Tax Credit (ITC), but will also sell GSAM the solar renewable energy credits (SRECs) associated with the projects.

As has been the case with other power companies, this move appears to be part of SJI’s attempts to refocus on its core regulated utility business.

“This transaction represents the latest chapter in our ongoing effort to transform our business by monetizing non-core, non-regulated businesses and increasing investments in regulated assets that provide highly-visible cash flows and earnings” stated SJI President & CEO Michael J. Renna.

This follows on the trend of asset management companies buying up portfolios of solar and wind projects in yieldcos, with Capital Dynamics swooping up 8point3 Energy Partners from SunPower and First Solar, and Canada’s Brookfield buying TerraForm Power and TerraForm Global.

Guggenheim Securities acted as the exclusive financial advisor to SJI in this most recent sale, with Akin Gump serving as the sole legal advisor to SJI.