Spruce Power Holding Corporation (NYSE: SPRU) announced today the acquisition of a residential solar portfolio from NJR Clean Energy Ventures (CEV), a subsidiary of New Jersey Resources Corporation (NYSE: NJR), for $132.5 million. The deal, which closed on November 22, 2024, represents a significant expansion for Spruce Power in the residential solar market.
The acquisition includes the “Spruce Power 5 Portfolio,” which consists of nearly 9,800 solar systems across New Jersey. These systems were installed as part of CEV’s residential solar program between 2010 and 2024. The systems are under long-term lease agreements with homeowners, with an average remaining contract life of more than 11 years. Spruce will now receive the customer payment streams and renewable energy credit incentives tied to the portfolio, effective as of October 1, 2024.
This acquisition significantly boosts Spruce Power’s footprint in New Jersey, which now stands as the company’s second-largest market with approximately 16,000 customers. The portfolio’s addition is timely, as Spruce recently launched its first in-market field services organization in the state during 2024. The increased customer density will create efficiencies in customer service, operations, maintenance, and environmental commodity market opportunities, driving cost reductions and improving overall service.
Chris Hayes, CEO of Spruce Power, expressed excitement about the acquisition, stating, “This is an exciting acquisition that provides immediate positive impact to Spruce’s financial and strategic outlook through continued scaling of our ownership of home solar assets and contracts. We are proud that this acquisition solidifies Spruce as a leading provider of residential solar energy in New Jersey. Over the past decade, the NJR CEV team has built an impressive portfolio of high-quality residential solar systems and cultivated a strong customer base. We look forward to continuing their commitment to safety, the environment, and customer service in the state of New Jersey.”
To fund the acquisition, Spruce utilized $22.7 million of cash on hand and secured a new debt facility. The company closed a $109.8 million debt facility, referred to as the “SP5 Facility,” with Santander. This facility is secured by the cash flow streams from the acquired lease contracts and certain renewable energy credit payments. It is non-recourse to Spruce Power, meaning the company’s other assets are not at risk.
Although Spruce did not update its full-year 2024 financial guidance, the company expects the acquisition to have an immediately accretive financial impact. The portfolio is projected to deliver a strong initial cash-on-cash yield. In evaluating acquisition opportunities, Spruce prioritizes levered cash flows, which reflect the cash available after servicing project-level, non-recourse debt, including both interest and principal payments. For the twelve months ending September 30, 2025, Spruce expects the Spruce Power 5 Portfolio to generate approximately $7.0 million in levered cash flow. Over the next three fiscal years (2025–2027), the portfolio is expected to generate cumulative levered cash flows of around $22.0 million.
This acquisition marks a key milestone in Spruce Power’s growth strategy, expanding its residential solar presence and enhancing its ability to serve New Jersey’s growing demand for clean, renewable energy. With this strategic move, Spruce further solidifies its position as a prominent player in the residential solar industry, not just in New Jersey, but across the United States.
Spruce Power’s acquisition aligns with the growing trend toward sustainable energy solutions and reflects the company’s commitment to increasing the adoption of renewable energy technologies. By acquiring these solar assets, Spruce will continue to support New Jersey’s efforts to reduce its carbon footprint and provide affordable, clean energy to homeowners throughout the state.
As Spruce Power moves forward with the integration of this portfolio, it will continue to focus on delivering top-tier customer service, ensuring the long-term success of the solar systems under its management, and contributing to the clean energy transition in New Jersey.
