NRG gobbles up Solar Power Partners for distributed solar

Clean power giant NRG Energy has been building a solar empire based on large centralized solar farms, but it’s keenly interested in the distributed solar market that serves businesses and government agencies as well. That explains the company’s Monday announcement that it has bought a project developer Solar Power Partners for an undisclosed sum.

What NRG will get through the acquisition is the nearly 30 MW of solar projects under operation or construction, the New Jersey company said. It also will take over the development of projects in states such as California, Hawaii and New Jersey, as well as in Ontario (Canada) and Puerto Rico.

San Francisco-based Solar Power Partners develops solar projects for businesses such as hospitals and grocery stores, airports, universities, water districts and other government agencies. This type of solar project – which could range from dozens of kilowatts to a few megawatts – is called distributed generation because it is located at where consumers are. Distributed generation panel projects are typically located on rooftops, but they also appear as ground-mounted systems for customers with ample land, such as airports. Many states and utilities offer rebates and other incentives for installing distributed solar systems; the federal government also runs a program that covers 30 percent of a project’s cost.

NRG has largely invested in centralized solar power plants, such as the 250 MW under construction by SunPower in California and the 392 MW being built by BrightSource Energy in the Mojave Desert of California. But NRG has been interested in distributed solar generation before its latest acquisition – it’s one of the investors in a 752 MW Project Amp, which recently secured a private loan of $1.4 billion that is partly backed by the U.S. Department Energy. The 752 MW will materialize on the rooftops of as many as 28 states.

Owning Solar Power Partners will give NRG an in-house distributed solar development team, however, and pit the company against established players such as SunEdison. SunEdison, owned by MEMC Electronic Materials, boosted its own project pipeline earlier this year with the purchase of the U.S. subsidiary of Fotowatio Renewable Ventures. Silicon wafer maker MEMC, which bought SunEdison for $$200 million in 2009, paid $131 million for the project developer and is set to pay another $103. 6 million for achieving certain performance targets. Competition also includes Recurrent Energy, which Sharp bought for $305 million in 2010, as well as SolarCity.

Photo courtesy of Solar Power Partners