ImpactAlpha, July 14 – The investment in the Arlington, Va.-based owner and operator of community solar projects is the latest move by Apollo, with $513 billion under management, to expand its sustainable investing platform. The private equity firm earlier this year said it would inject $50 billion into renewable energy and decarbonization plays over five years.
The deal, Summit Ridge’s Steve Raeder told ImpactAlpha, “fits in line with their investment thesis.”
Since launching in 2017, Summit Ridge has grown its portfolio of solar projects in operation or under construction to more than 300 megawatts. It expects to have more than 500 MW of solar and 100 MW hours of battery storage projects operational by the end of 2023, said Raeder, enough to serve around 175,000 residential and commercial customers.
The strategic investment comes amid surging interest in community solar – smaller scale solar projects that enable low- and moderate income residents or businesses to share in the lower costs of renewable energy without having to install their own panels.
“We see tremendous opportunity to access a high-growth segment of the renewables market while also producing positive environmental and social outcomes for local stakeholders,” said Apollo’s Wilson Handler.
Some community solar projects are owned by the community. In Summit Ridge’s case, it maintains ownership and signs up customers, who can save 15% to 20% on their energy bills via a credit from their electric utility.
Long the domain of smaller players such as Cambridge, Mass.-based SunWealth, deep-pocketed private equity firms are muscling into the space.
In January, impact asset manager Lafayette Square joined with Blackstone-backed renewable energy developer Invenergy to create Reactivate, a joint venture that is looking to invest half a billion dollars in dozens of community solar projects in the next two years.
Generate Capital, an owner and operator of green infrastructure, led a $240 million equity investment last year in NextAmp, a developer of distributed and community solar projects, just weeks after raising $2 billion of its own.
Also this week, the PE firm Syncarpha Capital is partnering with Rosemawr Sustainable Infrastructure Management to invest $100 million into financing community solar and storage projects.
Apollo last year assembled an impact advisory committee led by impact investing veteran Lisa Hall. Also on the committee: OneTen’s Maurice Jones, Robert Wood Johnson Foundation’s Kimberlee Cornett, and Women of the World Endowment’s Patience Marime-Ball, among others. The PE firm has tied its impact team’s compensation to performance indicators developed in part by the new advisory committee.