GE and Blackrock Announce Creation of Distributed Solar Development

On July 17, 2019, GE and Blackrock announced the creation of a new solar development company, Distributed Solar Development. In the agreement, GE will fold its own distributed solar and storage team into the new company while Blackrock will capitalize the company to grow it by 4 times in the next 5 years to reach a 400 MW project pipeline. GE will remain a shareholder in the new company, holding 20% of the shares, and Blackrock will hold the remaining shares.

Divestment Could Be a Misstep

This deal is part of GE’s current divestment drive from businesses far from its core expertise. While GE will remain in the renewable space through its wind manufacturing business, this divestment does highlight two areas of the energy transition that GE misses completely—solar and storage. Considering Guidehouse Insights’ report, Global DER Deployment Database, this could potentially be a misstep. 

GE’s distributed solar and storage businesses did not benefit from many synergies within GE. The most significant part of the technology used solar modules, inverters, and batteries that came from third-party suppliers and were not its own developments.

This deal is Blackrock’s first investment into the distributed energy segment. It allows Blackrock to expand into a growing market with a team that has been together for a long time.

Distributed Solar and Storage Competition Requires Whole Heart

The distributed solar and storage market is becoming increasingly competitive, with players entering from different sectors, including solar equipment manufacturers, system integrators, utilities, oil companies, and energy service companies. To succeed, companies must put their whole hearts into their efforts.
Overall, the new setup benefits all parties involved. For Distributed Solar Development, this deal offers new freedom to operate without the interference from other business units with competing interests and a source of capital to expand. Blackrock gets an experienced team at no cost and access to a new market, and GE gets a foot in the distributed energy market door at a low cost that will inform future business decisions.