Silicon Ranch raises $600M for its holistic take on solar development

Tennessee-based Silicon Ranch just raised another $600 million in equity investment to expand its unusually holistic brand of solar development.

The company launched in 2011 and built up a portfolio initially in the Southeast, a tricky region for early solar development given the paucity of open markets and the prevalence of grids dominated by historically solar-averse utilities. Silicon Ranch nonetheless built and operates more than 2.3 gigawatts of solar, and has signed contracts to bring the total north of 5 gigawatts nationwide. It also acquired Clearloop, a startup that connects corporate carbon offsets to clean-energy construction.

Silicon Ranch stands out from the crowd of solar developers in that it remains independent when the industry has gone through a wave of consolidation; it owns every project it develops and builds; and it has pioneered a holistic approach to sustainable development, incorporating regenerative land practices and recycling old solar panels.

The new investment, announced Thursday, technically arrives in two parts; $375 million closed in December from previous investors including Manulife Investment Management, TD Asset Management Inc. and Mountain Group Partners. The remainder of the $600 million round is expected to become final early this year. This raise comes just a year after the company raised $775 million.

The money will support the construction of Silicon Ranch’s multi-gigawatt pipeline of contracted projects, Chief Commercial Officer Matt Beasley told Canary Media on Friday. The firm also plans to add another 100 staff this year to its current roster of 200 employees.

Silicon Ranch takes a more capital-intensive approach to development than the industry norm: It purchases the land it builds on rather than leasing it. Owning the projects for the long haul means the company can’t cash out when a project is ready to build or begin producing electricity, as many developers do. But this strategy is integral to establishing itself as a trustworthy partner for rural communities, Beasley explained.

“We’re going to own and operate for the long term; that changes everything about the way we do our business,” he said. The infrastructure funds investing in the latest round ​“take a long-term view and see the world the way we do.”

Rural economic development animated this strategy from the get-go, as the company’s founders came from roles in the administration of former Tennessee Governor Phil Bredesen (D), which ended in 2011. Bredesen wrote the first check for the startup and served as chairman of the board for many years (he now acts as ​“founding chairman”).

Silicon Ranch clinched the first utility-scale installations in many states in the Southeast, Beasley said. It did so not by challenging Southern utilities but by pitching solar as a way to invest in rural communities and attract sustainably minded corporations to operate in the region.

“We weren’t chasing transient policy,” Beasley explained. ​“If we work together [with utilities], we can create more prosperity and jobs and investment in your service territory. It’s about relationships; it’s about trust.”

More recently, Silicon Ranch has worked out more-sustainable land-management practices for its solar plants. Instead of treating vegetation as a problem to be dealt with using chemicals and lawnmowers, in-house soil scientists and agriculturalists explore ways to graze livestock alongside solar panels and enhance the ecosystem.

“You can reduce operating expenses and improve the value of your land,” Beasley said. ​“It’s becoming a key point to assuage concerns from a lot of communities we’re engaged in.”

This philosophy extends to the end of a solar plant’s operating life: Silicon Ranch became the first utility-scale customer of Solarcycle, an emerging solar-panel recycling startup. Silicon Ranch recently shipped its first batch of damaged panels to Solarcycle’s new facility in Odessa, Texas for processing, Beasley said. It’s also worked to develop a more domestic supply chain, cutting deals with U.S.-based panel manufacturer First Solar, as well as with Nextracker, which is ramping up U.S. production of solar trackers.