RE Royalties to acquire royalty interest from Solaris

Executive Summary

• RE Royalties Ltd. entered into a definitive agreement to invest up to $9.0 million (U.S.) to acquire portfolio-level royalty interests in two distributed generation (DG) solar project portfolios owned by Solaris Energy Inc.
• The transaction involves an initial $4.8 million commitment for Portfolio 1, with $3.0 million financed at closing and the remaining $1.8 million expected by Q2 2026, subject to milestone achievements.
• Portfolio 2 remains subject to due diligence and is expected to close later in the year, representing a potential framework for acquiring long-term royalties on commercial and industrial DG projects.

Key Details

• Total Investment: Up to $9.0 million (U.S.) for royalty interests in two portfolios of distributed generation solar projects.
• Portfolio 1 Details:
  • Composition: 15 projects total (9 under construction/nearing operation, 6 in development).
  • Locations: California, Maine, Delaware, New Hampshire, and Colorado.
  • Purchase Price: $4.8 million (U.S.).
  • Payment Structure: Financed through multiple advances tied to development and construction milestones.
  • Initial Advance: $3.0 million (U.S.) financed at closing.
  • Remaining Balance: $1.8 million (U.S.) expected to be financed by the second quarter of 2026, subject to conditions.
  • Royalty Terms: Rate adjusted at each advance to target a pre-agreed minimum return based on a 25-year period; continues past 25 years for the remaining life of the projects.
• Portfolio 2 Details:
  • Status: Subject to completion of due diligence and customary closing conditions.
  • Timeline: Expected to occur later this year.
  • Composition: Nine projects (final composition may evolve as projects advance).
• Strategic Context:
  • Represents a framework agreement for RE Royalties to acquire long-term royalties on commercial and industrial DG projects.
  • Solaris Energy has a project pipeline with an estimated value of more than $400 million (U.S.).
  • Solaris CEO Nick Perugini noted the equity infusion helps leverage capital partnerships and simplify solar project finance.

Notable Quotes

• Peter Leighton, Chief Operating Officer, RE Royalties: "This transaction reflects RE Royalties' continued focus on partnering with renewable energy developers and acquiring royalty interests on diversified, cash-generating clean energy assets and near-term operating projects. Distributed generation solar remains a compelling segment of the market, and we're delighted to support Solaris as they continue to expand their U.S. solar portfolio."
• Nick Perugini, Chief Executive Officer, Solaris Energy: "This equity infusion from RE Royalties puts Solaris Energy in a unique position to leverage our existing capital partnerships with our rapidly growing project pipeline to simplify solar project finance... we're thrilled to join with the RE Royalties team to strengthen our relationships with internal sponsor equity, tax equity and lender partners to complete capitalization of our strong portfolios of distributed generation and solar plus storage projects."