The distributed solar sector, including residential, commercial, industrial and community solar projects, continues to attract capital and build projects. Two developers recently announced large funding deals.
DSD Renewables
DSD Renewables announced it closed a $238 million long-term financing from First Citizens Bank, Mitsubishi UFJ Financial Group (MUFG), and Nomura to support 233 MW of operational distributed solar and energy storage projects in 12 states.
The supported portfolios include 188 projects in operation across California, Connecticut, Illinois, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Ohio, Pennsylvania, Virginia, and Washington, D.C. They feature a mix of ground-mount, rooftop and canopy systems and about 127 MW designated as community solar.
The funding is a five-year mini-perm facility that provides a longer duration vehicle of five of DSD’s portfolios. Proceeds from the funding were used to refinance warehouse debt with a structure tailored to the performance profile of the assets, said DSD. The company said that like an asset back security, the structure leverages cash flow during the renewal period, but is still as flexible as a mini-perm loan based on debt coverage.
“This transaction marks an evolution in the market for distributed generation lending that acknowledges the captive nature of behind-the-meter assets that are linked to a stable, retail rate,” said Karin Logan, chief investment officer of DSD.
In March, DSD Renewables announced it secured a $140 million tax equity investment from Morgan Stanley Renewables. The transaction marked the first time DSD Renewables transferred tax credits created by the Inflation Reduction Act (IRA) to corporate buyers. Under a tax credit transfer transaction, renewable energy developers and owners are essentially able to sell tax credits for cash, making financing easier for project finance and business operations.
Projects developed by DSD Renewables have collectively produced over 560 million kWh of renewable energy, abating an estimated over 391,000 metric tons of carbon emissions, said the company. Founded as GE Solar in 2012 and rebranded to DSD Renewables in 2019 and passed the milestone of over 1 GW solar capacity deployment in 2024. DSD Renewables has cumulatively raised well over $2 billion in project capital.
GDEV Management
GDEV Management, a middle-market specialist in distributed energy resources announced it secured more than $200 million in capital commitments to its second flagship fund. Limited partners in the fund include a large Canadian pension plan and multiple U.S. insurance companies.
The funds support the company’s “Fund II” portfolio, which focuses on the firm’s strategy of building and scaling distributed energy resource (DER) platforms into mature infrastructure businesses. Its portfolio has brought over 330 MW of new energy generation and 260 MWh of energy storage capacity online in North America, largely developed behind-the-meter.
GDEV said Fund II has already made seven platform investments. This includes infrastructure advisory and engineering firm Nexus PMG, utility-scale energy storage developer Lightshift Energy, and multi-family EV charging owner and operator 3V Infrastructure.
GDEV said the behind-the-meter assets circumvent the need for lengthy permitting and interconnection processes, leading to “attractive, inflation-linked returns” and faster deployment timelines.
The company has received funding from global investors, such as Apollo Global Management, Ares Management, Sumitomo Corporation of Americas, and OIC.
“Over the past five years, our focus on distributed generation, energy reliability, and retail rate-linked revenue models has remained steadfast, even as markets and legislation experience volatility. For our businesses and investors, this thesis serves as a solid foundation for growth in a rapidly evolving market,” said Benjamin Baker, managing partner at GDEV.
GDEV launched its first fund “Fund 1” in 2020, investing across ten businesses focused on behind-the-meter and on-site generation infrastructure. Transactions include:
- The sale of Commonwealth Energy Partners to Perennial Power Holdings, a Sumitomo subsidiary;
- Relevate Power’s partnership with Apollo Global Management, which enabled its acquisition of Gravity Renewables; and
- Sunrock DG’s partnerships with CleanCapital and Nelnet, capitalizing the roll-out of its growing rooftop solar pipeline.
“Looking ahead to the future of the GDEV franchise, we remain positive and committed to our strategy, knowing that we are well-positioned to apply our policy-agnostic approach to scale even faster, amid evolving regulatory environments,” said Baker.
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“….we are well-positioned to apply our policy-agnostic approach to scale even faster, amid evolving regulatory environments,” said Baker.
I hope Baker is right. Solar parking lot canopy micro grids are the salvation from rising rates for ordinary rate payers, driven by the exploding demand from AI developers and CryptoPunks who are sucking up every available watt of cheap surplus renewable energy they can find and sticking it to rate payers.