Dive Brief:

• Community solar provider Perch Energy will merge with the community solar subsidiary of utility data and energy solutions provider Arcadia to form the United States’ largest community solar acquisition and management servicing platform, the companies said Tuesday.
• Perch Energy President and CEO Bruce Stewart will be CEO of the new venture, which will be majority-owned by Arcadia and manage more than 3 GW of solar capacity serving 90 developers, Perch and Arcadia said.
• Calling the new venture a reflection of “the natural evolution and maturation of the community solar business,” Stewart said in a statement that it “speaks to the clear need we’ve heard from solar project developers and asset owner partners who want a financially strong and scalable partner that can reliably serve them for decades.”

Dive Insight:

Though the Perch-Arcadia venture will operate as an independently managed business, Arcadia’s platform business will leverage the increased scale to support its Energy Procurement Advisory offering, which helps businesses structure energy procurements through a mix of behind-the-meter and front-of-meter generation, power purchase agreements and bundled or unbundled renewable energy credits in regulated and deregulated power markets.

The move will “[expand] our procurement offering with access to the largest portfolio of community solar capacity in the country,” Kiran Bhatraju, founder and CEO of Arcadia, said in a statement.

The venture will match Arcadia’s technology advantage with Perch’s historical strength with commercial customers, the companies said. With 1,000 solar projects in 16 states, the venture will serve “over 300,000 residential and commercial customer equivalents” and could target additional acquisitions in the future, the companies said.

Earlier this year, Perch announced an agreement with an Illinois-based fast food franchise operator to enroll 31 McDonald’s and Wendy’s locations in Perch’s community solar offering, reducing their electricity bills by an estimated 10% and potentially delivering as much as $1 million in savings over the agreement’s 20-year lifespan. 

The community solar model is particularly well-suited to businesses looking to reduce their environmental impact to meet corporate goals. Last year, Wendy’s said that nearly 100 company-owned restaurants and 40 franchise locations in New York, Massachusetts and Illinois would procure at least 30% of their power needs from Ampion Renewable Energy’s clean energy offering as the burger chain works toward a 47% reduction in absolute scope 1 and scope 2 emissions by 2030.

But community solar has long been a flashpoint in the often-tense relationship between utilities and distributed energy advocates, with the former raising concerns about indirect costs for non-participating ratepayers and the latter accusing utilities of misrepresenting the issue.

The California Public Utilities Commission and other state regulators have taken steps recently to address cost and equity concerns as some investor-owned utilities — including Duke Energy Florida and Florida Power and Light — advance plans for substantial utility-led community solar portfolios.

Total U.S. community solar capacity is expected to roughly double to about 14 GW (DC) from 2024 to 2029, Wood Mackenzie said in August. But as large community solar markets like California mature in the coming years, the U.S. national market is set to contract by an average annual rate of 11% from 2026 to 2029, it said.