NRG Revamps Residential Solar To Originate Business For Sale To Other Providers; Sells Majority Share of EV Charging Business

NRG Energy announced today the conclusion of the GreenCo strategic review process with an agreement to sell a majority share of EVgo, and with a restructuring and simplification of its residential solar business

As a result of the strategic review process for residential solar, NRG will integrate the business into NRG and streamline both its model and market. The operation will transition to an originate-and-monetize to third party model. As part of this change, NRG has entered into agreements with both Sunrun Inc. and Spruce Finance Inc., whereby both parties will be able to purchase NRG originated residential solar contracts and provide support over the life of the customer contract.

Additionally, as NRG streamlines its go-to-market approach, residential solar will focus on three markets where it already has a well-established foothold – New Jersey, New York and Massachusetts -- while maintaining a longer-term option to participate in NRG Retail’s core Texas market as economics for residential solar improve.

NRG said that this structure will allow it to maintain the customer relationship and the opportunity to provide additional energy related retail products (system power, natural gas, etc)

NRG will incur one-time costs to achieve of approximately $20 million in 2016.

Separately, NRG has agreed to sell a majority stake in its EVgo business to Vision Ridge Partners for total consideration of approximately $50 million, consisting of $19.5 million (subject to working capital adjustments) payable to NRG and the remainder contributed as capital to the business. NRG also has future earnout potential of up to $70 million based on future adjusted EBITDA targets. NRG will retain its EV-related obligations under the 2012 California Public Utilities Commission settlement. The sale of a majority interest will result in NRG reporting EVgo on an equity earnings basis.