NRG Yield to Invest up to $150MM Into Residential Solar Portfolios
Developed by NRG Home Solar; Partnership Allows NRG to More Quickly
Monetize Residential Leases
PRINCETON, N.J.--(BUSINESS WIRE)--Apr. 13, 2015--
NRG Energy, Inc. (NYSE:NRG) and NRG Yield, Inc. (NYSE:NYLD) have formed
a partnership that will invest in and hold operating portfolios of
residential solar assets developed by NRG Home Solar, a subsidiary of
NRG. This partnership will hold interests in an unlevered and tax equity
financed residential solar portfolio. As part of the agreement, NRG will
periodically monetize its residential leases through NRG Yield’s upfront
equity investment and still retain a residual economic interest in the
portfolio, while also providing NRG Yield with additional cash available
for distribution (“CAFD”). NRG Yield has committed to invest up to $150
million of cash equity into the partnership over time.
The partnership initially invested in two portfolios of leases owned or
developed by NRG Home Solar, including:
An existing, unlevered portfolio of over 2,200 leases across 9 states
representing approximately 17 MW with a weighted average remaining
term of approximately 17 years.
An in-development, tax equity financed portfolio of between
6,000-7,000 leases across at least 10 states representing
approximately 48 MW with a lease term of 20 years.
The partnership is expected to be fully invested within 12 months of
this announcement date and, when fully utilized, is expected to include
over 15,000 leases representing approximately 65 MW. NRG Yield expects
its investment in the partnership to generate an average unlevered CAFD
yield of approximately 7.5% over the contracted life of these
investments. This partnership should also allow NRG to realize a
significantly accelerated return of capital invested in NRG Home Solar.
“With the completion of this partnership between the companies, we
initiate a new phase in the growth strategy of the NRG Home business
unit and NRG Yield,” said David Crane, Chief Executive Officer of NRG
and NRG Yield’s Chairman and Chief Executive Officer. “This strategic
financial partnership, coupled with the growing strength of NRG Home’s
residential solar platform, provides us even more confidence in our
strategy and growth targets both for the residential solar business and
for the NRG Yield portfolio at large.”
NRG is leading a customer-driven change in the U.S. energy industry by
delivering cleaner and smarter energy choices, while building on the
strength of the nation’s largest and most diverse competitive power
portfolio. A Fortune 250 company, we create value through reliable and
efficient conventional generation while driving innovation in solar and
renewable power, electric vehicle ecosystems, carbon capture technology
and customer-centric energy solutions. Our retail electricity providers
serve almost 3 million residential and commercial customers throughout
the country. More information is available at www.nrg.com.
Connect with NRG Energy on Facebook and follow us on Twitter @nrgenergy.
About NRG Yield
NRG Yield owns a diversified portfolio of contracted renewable and
conventional generation and thermal infrastructure assets in the U.S.,
including fossil fuel, solar and wind power generation facilities that
provide the capacity to support more than 1.8 million American homes and
businesses. Our thermal infrastructure assets provide steam, hot water
and/or chilled water, and in some instances electricity, to commercial
businesses, universities, hospitals and governmental units in multiple
locations. NRG Yield is traded on the New York Stock Exchange under the
symbol NYLD. Visit nrgyield.com for more information.
Safe Harbor Disclosure
This news release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 with respect to NRG and NRG Yield. Such
forward-looking statements are subject to certain risks, uncertainties
and assumptions and include the NRG and NRG Yield’s future growth and
financial performance, and typically can be identified by the use of
words such as “expect,” “estimate,” “anticipate,” “forecast,” “plan,”
“believe” and similar terms. Although NRG and NRG Yield believe that
their expectations are reasonable, they can give no assurance that these
expectations will prove to have been correct, and actual results may
vary materially. Factors that could cause actual results to differ
materially from those contemplated above include, among others, general
economic conditions, hazards customary in the power industry, weather
conditions, competition in wholesale power markets, the volatility of
energy and fuel prices, failure of customers to perform under contracts,
changes in the wholesale power markets, changes in government
regulation, the condition of capital markets generally, our ability to
access capital markets, unanticipated outages at their generation
facilities, adverse results in current and future litigation, failure to
identify or successfully execute acquisitions, their ability to enter
into new contracts as existing contracts expire, NRG Yield’s ability to
acquire assets from NRG Energy, Inc. or third parties, their ability to
close the drop-down transactions, and their ability to maintain and grow
our quarterly dividends.
NRG and NRG Yield undertake no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. The foregoing review of factors that could
cause NRG’s or NRG Yield’s actual results to differ materially from
those contemplated in the forward-looking statements included in this
news release should be considered in connection with information
regarding risks and uncertainties that may affect NRG or NRG Yield’s
future results included in NRG’s and NRG Yield’s filings with the
Securities and Exchange Commission at www.sec.gov.
In addition, NRG and NRG Yield makes available free of charge at www.nrg.com
respectively, copies of materials they file with, or furnish to, the SEC.
Source: NRG Energy, Inc.
NRG Energy, Inc.
Dave Knox, 832-357-5730
Lindsey Puchyr, 609-524-4527