Nexamp secures $520 million in new equity financing

Solar project developer Nexamp announced today that it has raised more than half a billion dollars in an equity funding round led by Manulife Investment Management. Mitsubishi subsidiary Diamond Generating Corporation and sustainable infrastructure fund Generate Capital also participated in the round.

• The top line: Nexamp, which owns and operates programs in 17 states, has been at the forefront of demonstrating community solar’s potential as a key tool in grid reliability and flexibility portfolios. This latest $520 million will help the company continue to onshore its supply chain, speed up deployment of its project pipeline, and expand into new markets.
• The market grounding: The financing comes as utilities are grappling with how to meet an immense surge in demand from new data centers and manufacturing load. Meanwhile, the community solar market as a whole is scaling rapidly and maturing into a more active grid player thanks in part to the growth of solar plus storage projects, projected to increase by more than 200% by 2028, per Wood Mackenzie.
• The current take: Nexamp’s “unprecedented” raise is an important indicator of community solar’s potential to play a key role in tackling looming grid challenges, said CEO Zaid Ashai. “This is such good validation that we’re an institutional lever,” he said. “There’s interest in the investment community to institutionalize a rather fragmented community solar ecosystem, to drive down costs, and bring more sophistication to some of these interconnection issues and consumer-related issues.”

The last 12 months have been a whirlwind for Nexamp, which, in May, raised $400 million in tax equity and debt to build out 40 solar and storage projects across six states, and in August announced a partnership with solar module manufacturer Helene, which the companies said marked the largest community solar module order in U.S. history.

This week’s raise is indicative of the success of Nexamp’s fully-integrated business model, Ashai said.

“Investors in [high interest] environments tend to look for profitability, and scalability,” he told Latitude Media. Nexamp’s portfolio, which includes more than 1.5 gigawatts of generating and in-construction solar and storage projects, provides those assurances.

In recent years, the company has expanded beyond traditional community solar projects, adding around two dozen storage projects, which act as capacity resources for local grids, and piloting programs to manage distribution system upgrades and operate non-wires solutions for overloaded substations.

That level of interaction with local grids marks a new and more sophisticated version of community solar — one Nexamp can spearhead thanks to the fact that it owns projects long-term, Ashai said.

“We’re one of the few companies that has a laser-focused grid integration team,” he explained. “We have a strong emphasis on working with utilities as partners, and building grid resiliency and interconnection solutions that don’t require massive wire build outs.”

Nexamp and its backers are betting that model will keep it out in front of the rest of the industry in terms of what it can offer utilities, Ashai added. “When we come to utilities, we’re coming with a holistic solution set, rather than just one or two pieces of the puzzle.”