Recently launched Australian sustainable investment fund, New Energy Solar, has made two new investments in the US big solar market, taking a majority interest in two California solar farms, developed by US PV giant, SunPower.
The two new US investments – which take the fund’s solar assets to a total of four since it was established in November 2015 – were announced by New Energy Solar and SunPower on Thursday.
New Energy Solar, headed up by property and investment executive Tom Kline, is just the latest in a number of new funds set up in Australia – and abroad – to capitalise on the booming global large-scale renewable energy industry.
The fund hasn’t made made any investments in Australia, as yet, but according to its September Quarterly Update, had 300MW of potential local solar projects under review and expected opportunities to “ramp up” in 2017-2018, off the back of ARENA’s latest large-scale funding round.
“Australia’s excellent natural solar resources, coupled with a domestic solar industry that is still in a state of relative infancy compared with other markets, supports the Fund’s optimistic outlook for future domestic investment opportunities,” the September update said.
The new US SunPower projects, both located in Kern County, California, will each have a capacity of 67.4MW once completed – construction began in mid-2015, with full commercial operation expected to be achieved later this month.
SunPower will retain an ownership interest in the two projects and provide ongoing operation and maintenance services. And both have secured long-term power purchase agreements – one with Stanford University and one with Turlock Irrigation District.
New Energy Solar, which has also acquired shares in two North Carolina solar farms, one 43MW and one 47.6MW, said the SunPower projects were “excellent additions” to the fund’s portfolio.
“We are proud to partner with SunPower, one of the most experienced and leading developers and operators of utility-scale solar power,” said Kline in a statement.
Indeed, as the two companies note in their joint announcement, both the Kern County projects will serve electricity demand nearly 500km away.
“Projects like these demonstrate the flexibility with which organisations can now take advantage of cost-effective solar power by using larger capacity off-site solar resources to reliably serve a greater percentage of demand,” the media statement said.
Nam Nguyen, SunPower’s senior vice president noted that off-site solar allows for land-constrained organisations to benefit from the economies of scale achieved with larger solar installations.
“We congratulate New Energy Solar on their leadership in recognizing the value of this model and thank them for their partnership,” Nguyen said.
For New Energy Solar, the two projects are expected to generate a five-year average yield of approximately 6.5 per cent per annum.
The company said its portfolio now comprised over 200MW of large-scale solar farms underpinned by highly creditworthy off-takers and with a weighted average power purchase agreement term of 17 years.