A new acquisition in the US community solar sector starkly illustrates the changing dynamics in the broader industry, and underscores growing efforts by key players to scale. Perch Energy this week said it was buying Solstice, leaving it with over 3 GW of solar capacity across 16 states, the second significant deal within a year for Perch, which in March merged with Arcadia, another community-solar firm.
“At the end of the day, scale matters,” Perch CEO Bruce Stewart said in an interview. Overall heft is increasingly required, he continued, in order to secure better borrowing costs — renewables are more reliant on leverage as a proportion of overall project costs than fossil fuels — and to work out any supply chain bottlenecks. “As our partners are consolidating and scaling,” he added, “so too should we.”
The end of zero-interest rates several years ago combined with the removal of tax incentives and other federal support programs has driven a consolidation in the solar-power sector in particular: The CEO of the Gulf renewables giant Masdar told Semafor last month, for example, that it was looking to pick up struggling East coast assets.