Centrica Expands Its Solar Capacity Into California With Acquisition of Vista Solar

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International energy storage giant Centrica has expanded its solar engineering, procurement and construction (EPC) footprint on the west coast of the US with the acquisition of Vista Solar. We spoke with Stephen Prince, head of Centrica Business Solutions for North America about why the acquisition of Vista Solar made sense for Centrica and what it hints at for the future.

Solar power North Carolina

Centrica is one of the largest competitive retail providers in North America, with operations in all 50 states, the District of Columbia, and Canada under its Direct Energy brand. Centrica supports its over 240,000 large C&I customers in North America as well as its large base near its headquarters in the UK.

The acquisition of Vista Solar is a larger effort of Centrica to pivot away from its sizable exposure to the natural gas and traditional energy generation plants, led by CEO Iain Conn. Conn came to Centrica in 2015 after spending 7 years as the CEO of BP’s refining and marketing division. “As part of that strategy, he sold off a considerable part of centralized power production,” and took the proceeds and invested them in next generation technologies.

Centrica is no stranger to solar, with 160 megawatts (MW) of solar under its belt in just the last 2 years, while Vista currently has 40 MW of installations at 160 customers. Importantly, Vista Solar operates on the west coast, which is an area Centrica didn’t have much of a footprint before the acquisition.

“These are our first real EPC capabilities in the state [California],” Stephen shared. For context, at the end of 2017, Centrica had deployed 80 MW of solar in the UK and about 72-73 MW in the US, with hardly any of its US footprint in California. Centrica’s US solar business operates almost completely under its Direct Energy Solar brand. “The Direct Energy Solar business was much more concentrated in the northeast and mid-Atlantic,” leaving most of its capacity on the east coast. It had a very small sales footprint in California, but that had only come online in the last 12 months.

The acquisition also gives Centrica’s business solutions teams another tool in their toolbox as they work to expand their capabilities into renewables in a state that’s already heavily invested in rooftop, utility and C&I solar installations. Centrica’s business solutions operations are essentially a group of consultants that work with customers to define and deliver customized energy solutions.

That can look like anything from a simple rooftop solar installation, up to a complex natural gas turbine with a messy long term power purchase agreement with the local utility, or anything in between. For solar installations, Stephen shared that, “if you really want to maximize the value of your solar assets, you’re going to have to install storage at a minimum.”

Looking to the future, Centrica will continue to let Vista Solar operate largely independently as it works to tie it back to its work with customers through Centrica Business Solutions. The installations Stephen sees the new combined businesses doing are up in the multi-megawatt size, up to 10 MW for C&I customers. Within that range, they play mostly in the agricultural, commercial, government, house of worship, industrial, multifamily housing, and commercial real estate segments.

Beyond solar, Stephen shared that Centrica is working to develop its capabilities in the demand response space. While it may seem like just the latest buzz word, it’s clearly the hot new market as flexibility becomes the hottest commodity on the grid as utilities look for creative new ways to integrate and balance the intermittent renewables that are being pumped into the grid.

Stephen shared that his team at Centrica can deliver best in class demand response capabilities, but that they will only make sense if there are mechanisms in the market to support this cutting edge functionality. As of today, the number of programs and ways of leveraging demand response functionality to make or save money are almost as numerous as the number of companies working to develop demand response solutions.

Stephen is optimistic about the Vista Solar acquisition and eager to integrate the business into Centrica Business Solutions to ensure customers only see one Centrica, regardless of the internal business unit that’s actually doing the work.

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Kyle Field

I'm a tech geek passionately in search of actionable ways to reduce the negative impact my life has on the planet, save money and reduce stress. Live intentionally, make conscious decisions, love more, act responsibly, play. The more you know, the less you need. As an activist investor, Kyle owns long term holdings in Tesla, Lightning eMotors, Arcimoto, and SolarEdge.

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