Duke Energy Pays Cash to Acquire All of REC Solar
Duke Energy this morning announced it has upped its stake in REC Solar by acquiring all of the shares of California-based company for an undisclosed amount of cash. Duke acquired a majority equity stake in REC Solar, a nationwide provider of distributed solar energy and battery-based energy storage solutions for commerce and industry, in February 2015.
REC Solar is part of Duke's unregulated, independent Duke Energy Renewables group of companies, and that will not change as the nation's largest utility/energy services company looks to expand its “behind the meter” business lines and capabilities.
“REC Solar complements our strengths in forming strategic partnerships with customers of all sizes,” said Chris Fallon, vice president in charge of Duke Energy Renewables and Commercial Portfolio. “Energy solutions specifically tailored to the commercial consumer will expand renewable energy opportunities for enterprise, municipal, educational and business customers, large and small.”
A “One Stop Shop” for commercial distributed energy solutions
Duke cites the following as the primary, prospective benefits of acquiring full ownership of REC Solar:
- An enhanced offering of comprehensive energy strategies tailored to each customer’s unique needs and objectives, with even greater versatility and personalization.
- Immediate customer savings via simplified financial offerings, including leases and power purchase agreements.
- A one-stop-shop solution for customers to help them navigate the unprecedented levels of complexity in the marketplace.
The mid-tier, commercial and industrial segment of the solar energy markets is gaining momentum, a trend Duke intends to capitalize on further and to a greater extent by acquiring full ownership of REC. Duke highlighted. Non-residential, “behind the meter” solar power capacity s surged 31 percent higher year-over-year in 2016 as compared to a decline of 17 percent in residential solar generation capacity, according to the Solar Energy Industry Association (SEIA) and GTM Research.
A core facet of Duke's expanding renewables and distributed energy group of companies, REC Solar nonetheless will continue to be run as an independent business. That said, synergy – in terms of REC Solar working with other Duke Energy Renewables group members to develop and follow through on opportunities to incorporate “behind the meter” solar PV and battery-based energy storage in concert with other distributed, “green” and conventional energy resources – is a key aspect of Duke's decision to acquire full ownership of REC.
Capitalizing on the “green,” distributed energy trend
Just two days ago, Duke announced it is joining with Clemson University to deploy on-site solar energy generation capacity on the South Carolina university's campus. Up first is deployment of a solar PV canopy on a campus parking lot near Memorial Stadium. The parking lot canopy's solar panels will generate 1MW of emissions-free electricity – about 33 percent of the power used by the stadium, according to Campus Utility Services Director Tony Putnam.
Duke provided REC with $225 million to finance commercial-scale solar PV and battery energy storage systems in key state markets around the US when it acquired a majority stake in REC in February last year. REC used that to its advantage in landing contracts in Hawaii, California and elsewhere.
In addition, REC Solar has already worked as part of Duke Energy Renewables, and with Schneider Electric, to deploy two hybrid, community microgrids via an innovative microgrid-as-a-service (MaaS) business model in Montgomery County, Maryland. http://www.energycentral.com/c/cp/duke-energy-schneider-electric-leverage-“microgrid-service”-maryland-community The community microgrids produce some 10.7 million kWh of solar energy per year, reducing greenhouse gas emissions by 3,629 metric tons, Duke highlights.
“Duke Energy brings expertise in utility-scale renewables and enables us to be a one-stop-shop solution for customers in a complex marketplace,” REC Solar presidents and CEO Matthew Walz said. “We can offer our customers access to more financing options and diverse energy choices, whether it be offsite or onsite, battery storage, solar power or wind generation.”
Duke Energy Renewables’ renewable energy portfolio encompasses a total of 2,900MW of utility-scale wind and solar generation assets across 14 states, as well as 20 commercial wind and 63 solar power projects. The emissions-free power produced from renewable generation by and large is sold as per long-term contracts, e.g. leases and power purchase agrements (PPAs), to utilities, electric cooperatives, municipalities and commercial and industrial customers.
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