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KKR backs solar developer Avantus in $1B deal

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Mar 21, 2024
Solar panels in a project developed by Avantus

Solar panels in a project developed by Avantus. Photo courtesy of Avantus.

Private equity firms KKR and EIG are investing $1 billion into solar and battery developer Avantus.

Why it's the BFD: Solar had a record year in 2023, accounting for over half of all new electric capacity added to U.S. grids, and investors are increasingly backing companies and projects.

Zoom in: KKR will acquire a majority stake in Avantus and following the close of the deal, KKR and EIG will be the sole shareholders.

  • EIG was also previously an investor in the company.

Catch up quick: Los Angeles-based Avantus — founded in 2009 and formerly called 8minute Solar Energy — was an early utility-scale solar developer.

  • To date, it's developed 6.5 gigawatts of solar and 6.3 gigawatt hours of battery projects and says it has a total pipeline of 30 gigawatts of solar and 94 gigawatt hours of battery storage.
  • KKR has been raising a $7 billion climate fund to invest in energy transition companies and technologies.
  • Last year KKR backed British EV fleet and energy storage developer Zenobē with $750 million.

Big picture: Private equity firms are looking to use their big funds to invest in mature climate tech projects with no technology risk like solar and batteries.

  • BlackRock acquired Global Infrastructure Partners to expand its investments in large sustainability assets like solar, and is also backing utility scale solar company Recurrent Energy and solar roof firm Enviria.
  • In part thanks to strong support from the Biden administration, solar in the U.S. broke records for deployment last year, growing 51% year over year and adding 32.4 gigawatts of new generating capacity.
  • After decades of manufacturing efficiencies, utility-scale solar is the cheapest form of generating electricity.

Yes, but: Last year was challenging for some of the solar companies themselves as they faced rising costs of building utility-scale projects, driven in part by higher interest rates.

  • Overall solar stocks slumped in 2023.

What's next: Large volumes of solar projects will continue to get deployed in the U.S. at a rapid rate over the next few years.

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