NRG Energy Bolsters its Presence in Distributed Solar Market

NRG Energy Inc. (NYSE: NRG) has acquired distributed solar power developer Solar Power Partners (SPP).

Based out of San Francisco, the majority of SPP's 50 operational commercial projects are located in California. In fact, of the 30 MW of distributed solar projects the company has in operation or under construction, just ten are on sites outside of California. NRG will add SPP and its extensive development pipeline to NRG Solar, the company's rapidly growing solar subsidiary.

NRG Solar has been building its portfolio mainly through acquiring and developing utility-scale solar installations. Earlier this month the company announced another partnership with Arizona's First Solar to build a 66 MW solar farm in Los Angeles County.

First Solar Inc. will begin construction of the Alpine Solar project before the end of 2011 and anticipates NRG will be selling electricity from the new facility to Pacific Gas and Electric Company by Q3 of 2012. However, NRG Solar has begun expanding its reach into the distributed solar market.  In September the company splashed into the commercial sector bringing online a 2 MW installation at FedExField in Maryland.

Adding SPP, however, positions NRG Solar to tap the expanding distributed generation market, in particular in California. Commenting on its latest acquisition Tom Doyle, NRG Solar President noted, “With California’s goal to install 12,000 megawatts of distributed generation by 2020, and the increase in smart energy choices American businesses are demanding, this acquisition will place NRG at the head of the pack as the solar industry moves toward smaller solar projects that connect directly to the grid".

In 2011, NRG Energy has aggressively expanded its reach in the U.S. energy market. In August the company spent $190 million to add Energy Plus Holdings to its suite of energy retail companies (joining Reliant Energy and Green Mountain Energy). This purchase followed the acquisition of the 290 MW Aqua Caliente Solar project in Arizona from First Solar.

These moves, have not necessarily generated short-term revenue, as earlier this month NRG posted Q3 2011 revenues of $2.67 billion which were down from Q3 2010 numbers. Monday's announcement of NRG's purchase of Solar Power Partners had little affect on traders, as the company's stocks dipped nearly 2% in late afternoon trading.

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