As solar plants become more and more of a highly desirable asset, investors are snatching them up earlier and earlier in the development process. This includes projects which haven’t even closed on financing.
Yesterday Cubico Sustainable Investments, a London-based renewable energy developer and asset owner, announced that it had agreed to buy five solar projects in North Carolina, South Carolina and Texas from Cypress Creek Renewables. Only one of these projects has reached financial close, and Cubico plans to supply up to $165 million in equity to build these.
Cubico says that it expects to close on financing for these four projects in the first half of this year and to start construction thereafter. Palmetto Solar, the fifth project, is located near Orangeburg, South Carolina, and closed on financing at the end of December.
The company says that these represent a range of offtake structures. Cubico expects to put all of them online in by the fourth quarter of 2020.
For Cubico, this is a big move into the U.S. market, and the company says that this is just the beginning. “We are very proud of having reached this ground-breaking milestone to enter the U.S. market that further consolidates Cubico in the Americas, after having created one of the leading renewable energy platforms in Latin America,” stated Ricardo Diaz, head of Americas at Cubico.
Cubico is also getting on growing markets. While the North Carolina has been a leading solar market for a number of years, both South Carolina and Texas are emerging markets for large-scale solar. Texas in particular shows promise, with the latest interconnection queue in the Electric Reliability Council of Texas (ERCOT) showing over 40 GW of solar projects, 4.3 GW of which already have interconnection agreements.
Cypress Creek is not done with these projects and will continue to develop them, as well as managing construction and providing operations and maintenance for the projects once they are complete. “We look forward to working closely with Cypress Creek Renewables on taking the projects through financing and construction and into operations,” notes Oliver Alexander, head of USA at Cubico.
Nor does this mean that Cypress Creek is shifting its focus away from North Carolina, where it has had a major presence. In fact, the company expects the state to remain its largest market at least through 2021. ” This investment will help ensure that we continue to create good paying jobs and opportunities for years to come,” notes Jeff McKay, spokesperson for Cypress Creek.
These projects are among the many that are changing hands. According to the latest report by Mercom Capital, 29 GW of solar projects were bought and sold in 2018, the highest volume to date and roughly double 2015 and 2016 levels. And as Wood Mackenzie has reported, the appetite by investors exceeds the volume of available projects.