Spruce Power Holding Corporation has announced the signing of a new Spruce Pro servicing partnership with Hot Purple Energy, a commercial and industrial (C&I) and residential solar installer, to monetize Solar Renewable Energy Credits (SRECs) in California. This agreement is part of Spruce’s broader strategy to use its platform and expertise to help installers and C&I operators unlock the value of unclaimed SREC credits.
Chris Hayes, Chief Executive Officer of Spruce, said in a statement, “Recent market changes in California have made registering SRECs financially rewarding for the first time, more closely aligning with mature SREC markets in certain states on the East Coast. We view scaling SREC registration in California as a low cost, low risk opportunity to generate high margin, cash flow for the Company. Spruce is among a very small number of companies that have completed the approval process to enable monetization of dormant SREC revenue within all three of California’s largest utility zones.”
He continued, “This puts Spruce in a unique position to capitalize on a meaningful market opportunity. We are in active discussions for the rights to acquire SRECs from significant 3rd party installers as well as numerous mid-size and local companies that own residential and C&I solar sites in the state. The monetization of SRECs plays to our strengths and has strong potential to deliver capital-light growth. Typical contracts will generate approximately 7 years of cash flow, allowing Spruce to grow our SREC trading book in California.”
Under the terms of the partnership, Spruce will take responsibility for the initial and ongoing registration of Hot Purple’s SRECs with the Western Renewable Energy Generation Information System (WREGIS). In addition, Spruce will manage the monthly reporting of solar production and the sale of SRECs generated by Hot Purple’s solar assets. Through this collaboration, Spruce and Hot Purple aim to create a new stream of cash flow that will benefit both companies.
