Dive Brief:

• Aspen Creek Power Holdings, a renewable energy development and finance firm based in California, is merging with North Carolina-based renewable energy developer Oakhurst Energy Development to form an integrated energy development and independent power producer called Headwater Energy.

• The new company will develop solar and solar-plus-storage energy projects, navigating everything from origination to construction in-house, in the southeastern United States, the companies said Tuesday.

• By moving early stage projects through the entire development process under a single company umbrella, Headwater Energy should be able to maximize financial returns on its projects, said Patrick Leibach, CEO of Aspen Creek Power Holdings and incoming CEO of Headwater Energy.

Dive Insight:

Marking early stage renewable projects is more difficult in today’s market, but Leibach, along with Oakhurst Energy CEO Latham Grimes, still believe the coming era is full of opportunity for renewable energy developers willing to commit to projects for the long-haul.

The two companies will officially form Headwater Energy on Jan. 1 to begin fundraising in earnest for several projects with growing capital needs as they approach construction, Leibach said. They also plan to raise funds to support the overall growth of the company, which they believe is well positioned to capitalize on current renewable industry trends.

Oakhurst Energy, founded in 2022, is an early-stage developer with experience in originating utility-scale solar projects in the Southeast. Aspen, on the other hand, has focused on the acquisition, finance, operation and ownership of late-stage utility scale projects since its own creation in 2020 — Aspen was, in fact, one of the early investors in Oakhurst, Leibach said.

Leaders from both companies say merging to create a single developer capable of guiding projects through the entire development cycle should come with financial benefits in a market where the value of a project soars as it nears construction.

“We feel like we can create value by being committed to doing the hard work over the long haul, and then we will reap the benefits of that,” Grimes said. “There aren't any shortcuts anymore. There were years ago, because interconnection queues weren't as clogged up and zoning was easy. But that's not the way it is anymore. It takes years and years and you have to be strategic.

“There is going to be a scarcity of good projects that can get built, so focusing on a big pipeline, relying on the best people you can find, and taking early to mid stage projects to late stage is how you create value,” Grimes said.

The new company will begin the year with a pipeline of 4.3 GWdc of solar and solar-plus-storage projects under development, some of which have already secured interconnection. While they hope to scale the company quickly in the coming years to create a platform for end-to-end project development, Leibach said they have yet to determine whether they will ultimately sell all the projects they develop to third parties. Headwater may continue to operate some of the projects in its portfolio if investors are interested in financing options outside straightforward acquisitions.

“We have the capacity to do all that, and we know that's an attractive product,” Leibach said. “But we know there are buyers who are themselves comfortable stepping into late-stage projects at late-stage prices.”