Duluth's Allete Inc. is buying solar developer New Energy Equity for $165.5 million.
Duluth's Allete buys solar developer for $165 million
Allete is acquiring New Energy Equity, a Maryland company that focuses on small-scale projects.
March 3, 2022 at 11:02PM
Allete, the parent of Minnesota Power, said the acquisition would complement the company's larger-scale renewable energy projects.
"With this significant and strategic entry into solar opportunities, we will grow and expand Allete's capabilities," Allete chief executive Bethany Owen told investors Thursday.
Maryland-based New Energy Equity was founded in 2010 and mainly focuses on small-scale or "distributed" solar production. It has completed more than two dozen projects in Minnesota.
"With our combined experience, we can expand the reach of distributed-generation solar and storage projects," New Energy chief executive Matthew Hankey said in a statement.
The company's leadership and employees will remain in place at New Energy's headquarters in Annapolis.
Allete said New Energy had $20 million in pre-tax profits in 2021r and has 2,000 megawatts of projects lined up in 26 states over the next few years.
"Their smaller size helps mitigate supply chain and other risks while allowing new energy to nimbly enter new markets," Owen said.
The transaction is expected to close in April.
Often through its subsidiary Allete Clean Energy, Allete has largely focused on wind projects and connecting to Canadian hydropower to reach its renewable power goals. Minnesota Power gets half of its electricity from renewable sources, the company says.
Last fall, Minnesota Power sold some of its stake in a planned 600-megawatt natural gas plant in Superior, Wis., a project that has drawn the ire of environmental activists for its expected contributions to climate change. The utility has said the plant is needed to replace coal power and provide electricity when solar and wind are unavailable.
Allete executives said the New Energy acquisition could open solar storage capabilities — the ability to put solar power on the grid when the sun doesn't shine.
Investors on Thursday sent the company's share price up 2.4% to $64.08.
All 80 aboard the flight survived; the last of 21 injured was released from the hospital Thursday.
