Greenbacker Delivers 2023 Results

Greenbacker Renewable Energy Company LLC (“Greenbacker,” “GREC,” or the “Company”), an independent power producer and a leading climate-focused investment manager, has announced financial results[i] for 2023, including annual revenue and year-over-yeargrowth in operating capacity and clean energy generation. During the year, the Company’s investment management business segment, Greenbacker Capital Management (“GCM”) also announced the launch of its fourth sustainability driven investment strategy, focused on Energy Transition Real Estate.

Company completed first project “repowers;” monetized domestic content bonus with sale-leaseback financing; and increased operating fleet by 24%

GREC’s fleet of renewable power projects continued to grow and diversify in 2023, as the Company captured opportunities created by the newly minted Inflation Reduction Act (“IRA”).

On the independent power producer (“IPP”) side of its business, Greenbacker—working closely with its contractor Bedrock Renewables (“Bedrock”)—completed its first wind repowers (replacing older wind turbines on existing GREC assets with new, more efficient ones), bringing three projects through redevelopment and construction. Two of these projects entered commercial operation in late 2023, with the third reaching that milestone in February 2024. 

Repowering these facilities creates value for Greenbacker in several ways, including:

1.      Harnessing efficiency gains in newer technologies to improve the projects’ power-generating ability.

2.      Extending the projects’ expected useful life and contracted power purchase agreements (“PPAs”).

3.      Requalifying the projects for additional tax credits under the IRA.

4. Reducing ongoing maintenance costs by completely replacing aging equipment with new equipment.

As part of Greenbacker’s repower strategy, the Company and Bedrock sourced equipment for the projects domestically, supporting well-paying long-term jobs for Americans and qualifying the facilities for the domestic content tax credit adder. The domestic content requirements of the IRA offer a 10% bonus investment tax credit (“ITC”), bringing the total credit to 40% of the qualified build cost. Monetizing this credit through a sale-leaseback financing allowed Greenbacker to fully finance the repower cost. 

As IRA tailwinds for the energy transition asset class became clearer, Greenbacker was among the first to capitalize on two of its new incentives

While the IRA was passed into law in 2022, the benefits of the legislation were difficult to realize in 2023. Delays in IRS guidance for how the credits would be interpreted[ii] limited transactional volume throughout the year. As guidance was issued month by month, the market began to form a transactional precedent, and volumes increased. Greenbacker was at the forefront of these structural developments.

In addition to GREC transacting on one of the first domestic content tax credit transactions, a GCM-affiliated investment vehicle also completed one of the industry’s first solar PTC deals[iii]—a $148 million tax equity commitment to finance what is now the largest operating clean energy asset to date across the combined GREC and GCM project fleet. In 2024, Greenbacker expects the tax equity financing market to stabilize even further as precedent becomes more established and transactional efficiencies increase.   

Greenbacker launches new strategy focused on Energy Transition Real Estate; Company’s aggregate AUM increased to $3.8 billion

Greenbacker’s investment management business segment GCM also reached another new milestone in the year, launching its fourth sustainability driven investment strategy. GCM hired former Blackstone Managing Director David Zackowitz to the newly created position Head of Real Estate Investments to lead the strategy, as well as expand its real estate investment team with other key hires, including former Blackstone Principal Evan Sherman. The new strategy focuses on acquiring Energy Transition Real Estate where the company can leverage access to electricity to host distributed generation, storage, and charging infrastructure.

GCM raised over $263 million for its managed funds during the year, increasing fee-earning AUM[iv] to approximately $700 million, as of December 31, 2023. Aggregate AUM,[v] which includes the assets managed for Greenbacker Renewable Energy Company, for which GCM does not receive management fees, rose to approximately $3.8 billion. As of December 31, 2023, GCM served as the investment manager to five energy transition-focused funds.

Company’s annual total operating revenue topped $181 million, driven by 38% year-over-year increase in solar power generation; total annual production increases were muted, due to wind assets strategically taken offline for repowering

GREC’s fleet of clean energy projects produced approximately 2.5 million megawatt-hours (“MWh”) of total power, representing a year-over-year increase of 7%. That increase was primarily due to a 38% annual production increase from Greenbacker’s operating solar fleet, which generated nearly 1.5 million MWh of clean power. The new solar assets brought online during 2023 helped drive this production growth and contributed an additional $11.4 million to the fleet’s annual operating revenue. In 2024, these new assets are expected to generate $21.8 million in operating revenue.

The fleet’s production growth was somewhat constrained by the three wind assets that Greenbacker strategically took offline to repower with new equipment. Despite being out of operation for portions of the year while that work was conducted, the three projects generated $14.6 million in annual operating revenue in 2023. With their repowering complete, those projects have now returned to operation, are generating wind energy at higher efficiency, and are expected to contribute $24.2 million to the fleet’s operating revenue in 2024.

GREC Operating Fleet	2023	2022	YoY Increase (total)	YoY increase (%)
Clean power produced by solar assets (MWh)	1,473,384	1,067,114	406,750	38%
Clean power produced by wind assets (MWh)	978,236	1,198,236	(220,000)	(18)%
Total clean power generated* (MWh)	2,452,100	2,265,350	186,750	8%

*Does not include power generated by biomass facility.

During 2023, Greenbacker generated total operating revenue of $181.2 million, primarily driven by energy revenue within the IPP segment, which totaled $159.3 million and included $134.6 million from the Company’s long-term PPAs. Funds From Operations (“FFO”) was $(11.5) million for the period and represents the $31.8 million of Adjusted EBITDA less cash interest expense and distributions to our tax equity investors. The net loss attributable to Greenbacker was approximately $79.5 million, driven by non-cash depreciation, amortization, and impairment charges recorded during the period.

For the year ended December 31, 2023	In millions
Select Financial Information
Total Revenue	$ 173.2
Total operating revenue*	$ 181.2
Net loss attributable to Greenbacker	$ (79.5)
Adjusted EBITDA†	$ 31.8
FFO†	$ (11.5)

NOTE: See the Company’s 2023 10-K filed with the SEC for additional financial information and important related disclosures.
*Total operating revenue excludes non-cash contract amortization, net.
†See “Non-GAAP Financial Measures” for additional discussion. Adjusted EBITDA and FFO are unaudited.

Operating fleet adds 292 MW, including Company’s second and third largest operating projects to date

Much of the Company’s new investment activity in 2023 was directed toward the repowers and the continued development of its pre-operational assets. During the year, Greenbacker’s development and construction capabilities resulted in 292 MW of renewable energy assets being placed into service, growing its operating fleet by nearly 24%, year-over-year.

This additional capacity included the Company’s second and third largest operating assets to date. (The largest operational asset in the GREC portfolio is the 104 MWdc / 80 MWac Graphite solar project in Carbon County, Utah, which came online in 2022).

The two new projects were the 103.7 MWdc / 80 MWac MTSun solar project which entered operation in Yellowstone County, Montana during the first quarter of 2023, and the 99 MWdc / 80 MWac Fall River solar asset in Fall River, South Dakota which reached commercial operation in September 2023. Both assets have long-term PPAs in place with investment-grade utilities.

Greenbacker’s 99 MW Fall River solar project

The 99 MWdc / 80 MWac Fall River solar project represents the third largest asset in Greenbacker’s national operating fleet.

“After continuing to accelerate Greenbacker’s growth in 2023, we look forward to pushing the boundaries even further in 2024,” said Charles Wheeler, CEO of GREC. “We expect to start construction on our largest pre-operational asset to date, as well as begin the process of repowering additional assets in our operational fleet. Looking further ahead, we expect to complete construction on the vast majority of our pre-operational fleet and place it into service on a rolling basis by the end of 2027.”

Majority of pre-operational fleet to enter operation, become revenue-generating by end of 2027

With the tailwinds of the IRA, and the expertise to harness them, Greenbacker plans to continue building out its pre-construction pipeline in 2024, converting development opportunities into risk mitigated pools of operational cash flows.  

The Company expects that these additional operational assets will generate strong growth in revenues and EBITDA, as it begins benefiting from the additional contracted cash flows from an increasing number of operating projects. 

The table below illustrates Greenbacker’s estimated timeline for bringing into service its current pre-operational pipeline.

	Operating Fleet (MW)	Pre-Operating Fleet (MW)	Total (MW)
4Q 2023	1,533	1,751	3,284
4Q 2024	1,788	1,496	3,284
4Q 2025	2,246	1,038	3,284
4Q 2026	3,103	181	3,284
4Q 2027	3,257	27	3,284

Capacity figures are rounded to nearest MW. Figures may not add to stated totals due to rounding. The figures in this table reflect the estimated timeline as of 12/31/23. Timelines may change or be adjusted based on market conditions.

Compared with the estimated timeline included in Greenbacker’s third-quarter results press release, the table reflects approximately 64 MW that have been removed from Greenbacker's fleet. The majority of these MW represent pre-operational assets that no longer optimally align with the Company’s investment strategy for various reasons, and their removal was de minimis to GREC’s overall value.

“In 2024, we plan to capitalize on our operational expertise and seek to deliver value to shareholders through yield compression on our assets,” said Dan De Boer, Greenbacker’s new Head of Infrastructure. “History shows that the best opportunities to invest have come out of periods of turbulence and uncertainty; with global infrastructure fundraising down significantly in 2023[vi] and, in our view, a period of unprecedented macro expansion ahead of us in the energy transition space, we believe that the time to act on that opportunity is now.”

Company’s investments abate carbon emissions, conserve water, and support green jobs  

Along with significant annual revenue and year-over-year production and capacity increases, GREC also continued to deliver on its sustainability and impact goals during the year.

As of December 31, 2023, Greenbacker’s clean energy assets had cumulatively produced approximately 8.7 million MWh of clean power since January 2016, abating over 6.1 million metric tons of carbon.^[vii]  The Company’s clean energy projects have saved more than 5.9 billion gallons of water,^[viii] compared to the amount of water needed to produce the same amount of power by burning coal. Greenbacker’s investment activities will sustain over 6,400 green jobs.^[ix]

Additionally, Greenbacker officially became signatories of the internationally recognized Principles for Responsible Investment in 2023 and was also named to the prestigious ImpactAssets 50 2023 impact fund managers.

Greenbacker | https://greenbackercapital.com

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