Sun Tribe Solar Turns to Utility-Scale Projects to Tap Virginia’s Growth

Source: By Julian Spector, GreenTech Media • Posted: Thursday, October 3, 2019

Sun Tribe Solar is expanding from commercial development and construction into the utility-scale business, as Virginia’s renewables market prepares for rapid growth.

Four-year-old Sun Tribe is a leader in Virginia’s distributed solar market. But the state’s utility-scale market is now poised to grow considerably, supported by Dominion Energy’s plans for gigawatts’ worth of new installations and Governor Ralph Northam’s new goal of 30 percent clean energy by 2030.

Sun Tribe wants to serve that demand with more larger-scale projects than it has built in the past.

The company has seen triple-digit-percentage revenue growth each year it served the commercial market, said Devin Welch, chief strategy and development officer. Sun Tribe has grown to around 80 employees and 100 projects built or in development, he said.

To chase the utility-scale market, the firm has brought in former Coronal Energy President Danny Van Clief, who previously led HelioSage Energy, an originator and developer that Coronal bought in 2015 along with its 320-megawatt (AC) contracted pipeline.

Van Clief took the reins at the merged company but stepped away after financial backer Panasonic sold Coronal’s development arm to Ørsted in May, as part of the Danish developer’s recent push into U.S. onshore renewables.

Being based in Virginia as the market is set to expand “affords us an opportunity to really localize our business plan and customize it in a way that’s going to be hard to compete with,” Van Clief told GTM.

The move evokes the early days at Strata Solar and Cypress Creek Renewables, which turned their local knowledge of North Carolina into a booming solar business.

Big things ahead for Virginia

The U.S. utility-scale solar market has seen significant churn of late. SunPower pulled out of utility-scale development to focus on distributed solar. Cypress Creek refocused on new geographies and cut its engineering, procurement and construction (EPC) arm after growth slowed in the Carolinas.

Still, the market is expected to continue posting strong installation figures in the years ahead, and Virginia would appear to offer more opportunity than many states.

Virginia currently ranks 18th in installed capacity, with 690 megawatts (DC) of operating capacity providing just 1 percent of the state’s electricity, according to the Solar Energy Industries Association. But it’s ranked seventh in expected deployments over the next five years.

The Virginia market draws strength from three key factors, said Colin Smith, senior analyst for utility-scale solar at Wood Mackenzie Power & Renewables.

First, Dominion Energy, its largest vertically integrated utility, is calling for upward of 5 gigawatts over the next 25 years in its long-range plans. The state is a hotbed for data center construction, which brings powerful corporate customers eager for clean power.

And Virginia connects to the PJM grid, meaning that corporate offtake deals can build in merchant revenue for the period after their contracts expire. “Some of these corporate deals might not be happening if Virginia wasn’t connected to a wholesale power market,” Smith said. “It enables more opportunities.”

Unlike a pure-play developer, Van Clief’s team will sit in the same Charlottesville office as Sun Tribe’s engineering and construction crew. Though the company currently is not planning to construct its own utility-scale plants, that expertise will be valuable in development strategy, Welch said.

“The EPC function is very concerned with the details of how to actually deploy solar onsite,” he said. “We’ll be able to embed quality into our projects earlier. There are important feedback loops between early-stage development decisions and downstream construction.”

The big question for the industry now is what comes from Northam’s September executive order, which calls for decarbonizing the state’s grid by 2050. The order also calls on Dominion to fully develop its offshore wind zone by 2026; the utility is planning a 2.6-gigawatt behemoth to be completed that year.

But more specific and binding requirements still have to go through the legislature, which has shown an interest in grid modernization in recent years. It passed the Grid Transformation and Security Act in 2018, which called for more demand-side management, energy storage and renewables. Following that law, Dominion finalized four grid storage pilot projects it will test for five years, potentially leading to more storage investment.

“The policy has to translate into actionable legislation if you want to connect the dots from that announcement to what the market’s going to do,” Van Clief said of the executive order.