Spruce Power Acquires $20.9 Million Worth of 2,400 Residential Solar Systems

solar panels

Credit: Canva

by | Aug 22, 2023

solar panels

(Credit: Canva)

Spruce Power Holdings, a distributed solar energy company in the United States, has acquired more than 2,400 residential solar systems and contracts from a publicly traded, regulated utility company for a total investment of $20.9 million. 

Expanding Residential Solar Systems

Spruce’s acquired portfolio comprises residential solar systems located in California, New Jersey, and Massachusetts. These systems boast an average remaining contract life of nearly 11 years. It is estimated that this portfolio will contribute approximately $4 million in annual run-rate revenue to Spruce’s operations.

Notably, Spruce was already providing third-party services for this portfolio, streamlining its integration into the company’s existing portfolio of home solar assets and contracts.

As a result of this acquisition, Spruce’s total portfolio now exceeds 75,000 home solar assets and contracts, reflecting almost 50% growth in less than a year since the company shifted its focus to become a pure-play owner and operator of residential rooftop solar assets in 2022. This recent acquisition was finalized on August 18, 2023.

Funding and Financial Outlook

To finance this acquisition, Spruce utilized proceeds from the concurrent expansion of its Spruce Power 2 credit facility (SP2 Facility). The performance of Spruce’s existing assets in the SP2 Facility’s collateral pool allowed the company to secure additional debt financing, mitigating the need for substantial cash equity for the acquisition. It’s important to note that the SP2 Facility, along with all of Spruce’s debt, is non-recourse to the company.

According to Sarah Wells, Spruce’s chief financial officer, the acquisition, in addition to the projected financial outlook of the company, is expected to bring in between $120 million and $130 million.

Spruce Power Holdings Corporation is an owner and operator of distributed solar energy assets across the U.S. The company offers subscription-based services that make rooftop solar power and battery storage accessible to residential communities. The company said it offers subscription-based services for solar energy and battery storage that gives users access to the technologies without large investments or maintenance costs.

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