The POWER Interview: CleanCapital Drives Investments in Clean Energy

Investments in clean energy projects have hummed along in the past few years, with the growth of renewables worldwide continuing to increase levels of solar, wind, and other resources in the global energy mix.

Thomas Byrne has been in the middle of this energy transformation. Byrne, co-founder and CEO of CleanCapital and a graduate of the University of California-Berkeley and the UCLA School of Law, leads the company’s strategy and operations. Before CleanCapital, he served as partner and general counsel at True Green Capital, a private equity firm focused on distributed solar investments. He led the financing of landmark clean energy projects including NRG’s California Valley Solar Ranch, Caithness’ Shephards Flat Wind Project, and Terra Gen’s Alta Wind Energy Center.

Thom Byrne of CleanCapital

In his role as an attorney specializing in clean energy financing, Byrne saw first-hand how inefficiency was hampering the growth of clean energy investment. He envisioned a technology-based solution, and founded CleanCapital, which looks to connect investors with opportunities in the clean energy space, with an eye toward “reducing the world’s dependence on fossil fuels and generating attractive returns to boot.”

Byrne in a blog post about the launch of CleanCapital wrote: “Frustrated by the status quo, we set out to change the paradigm that was restraining clean energy growth. This is why we created CleanCapital — a technology-driven platform that is accelerating clean energy with simpler finance.”

CleanCapital, based in New York City, today owns and operates more than 100 commercial and industrial-scale solar projects across the U.S. Byrne recently talked with POWER about how his company is supporting the global transition to cleaner energy and power generation.

POWER: How did you get started with creating CleanCapital?

Byrne: We started in 2015, with a goal of getting institutional capital into the distributed clean energy space. We looked at small-scale renewables, solar, storage, energy efficiency, and we thought there was a really interesting opportunity to get institutional investors interested in it.

POWER: What are you working on today?

Byrne: We are now working on energy storage; we’re partnered with Black Rock and CarVal; and we’re validating what we set out to do, which is to utilize technology and data to drive capital solutions. Our proprietary platform is designed to make it easier for us to analyze and diligence projects to draw on our capital. It’s one of the most interesting things we’ve done, on the software front, giving us an edge and making it easier for us to do these transactions.

(Editor’s note: CleanCapital in April of this year announced a new investment in the firm from funds managed by BlackRock’s Renewable Power Group. CleanCapital said, “The investment provides for the continued growth of CleanCapital as it expands into new markets and new renewable energy asset classes, with a specific focus on distributed solar and energy storage.” The two companies had closed on CleanCapital’s largest transaction to-date in November 2018, the acquisition of a 46.9-MW portfolio of 60 operating solar energy projects. Bloomberg earlier this year reported that BlackRock “manages renewable-energy assets on four continents worth more than $5 billion.” CleanCapital and CarVal, which has its U.S. headquarters in Minneapolis, Minnesota, last year announced that CarVal was investing $250 million in CleanCapital’s latest solar portfolio investment vehicle.)

POWER: Are you actively seeking these types of deals with leading companies in the renewable energy space?

Byrne: That’s an important part of our growth strategy. We’re currently in 11 states. At the end of 2018, we made a decision to do two things to grow: Grow our acquisitions of operating solar assets to $500 million, and go into new asset classes, like energy storage. And there’s a third way … we’re looking to our neighbors in Canada and Mexico, and then in Europe.

POWER: How has CleanCapital’s strategy evolved?

Byrne: When we first started this company, we were driven by outbound. We were looking for people interested in selling a project. That’s the old way, and we’re still doing some of that, but now we have a significant amount of inbound. We’ve become a buyer of assets and an investor, and that credibility is yielding a lot of inbound sales. We provide the developer and owner liquidity when they want it quickly. We transact quickly.

POWER: Can you talk about your company’s software?

The software has many components. It contains proprietary data, and enables us to search and review documents much faster. It provides a checklist of documents; it really powers faster and more efficient due diligence. After we own the asset, it provides for monitoring the asset so investors and lenders can see how the asset is performing. Our software is something that every stakeholder in this business can use, whether it’s a utility, lender, or investor, but it’s built primarily for CleanCapital’s own internal use.

POWER: You call CleanCapital an investment platform. Who are some of the folks interested in the platform?

Byrne: CleanCapital’s platform is tailored to institutional investors… the large insurance companies and pension funds. We could be the capital provider for a project, raising the capital and delivering it to the developers. Hopefully our system helps more capital get deployed, and that’s already happening. We probably see 15 MW [of projects] a week, probably [worth] $100 million a week. It’s about educating [project developers] and investors, and getting the word out.

Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).