BP Acquiring Full Ownership of Solar Energy, Battery Storage Company Lightsource bp

BP is acquiring full ownership of Lightsource bp, a developer and operator of utility-scale solar and battery storage assets. The deal involved buying 50.03% of solar company for £254 million (roughly US$321 million) -- essentially valuing the overall business at £508 million (US$642 million). The buyer expects to close the deal sometime in mid-2024.

Lightsource bp, based in London, was founded in 2010 by CEO Nick Boyle. Looking ahead, Joaquin Oliveira, currently BP senior vice president, finance for gas & low carbon energy, will become co-CEO of the solar energy company.

Related: See all M&A deals involving sustainability, green IT services & renewable energy listed here.

Lightsource bp: Business Background

BP has owned a stake in the solar company since 2017. The solar energy company has since expanded from operating in three countries to 19, built a 61GW development pipeline, and grown to over 1,200 personnel, the buyer said. Lightsource bp's overall strategy calls for the deployment of 25GW of solar by 2025. 

The solar company reported underlying EBITDA of £287 million in 2022. The buyer says it will "continue to target double digit equity returns from this business."

In a prepared statement about the deal, Anja-Isabel Dotzenrath, BP executive vice president for gas and low-carbon energy, said: “This is a natural evolution of the partnership we have built over the past six years - now we will be able to take Lightsource bp to the next level of profitable growth and performance. We will continue to scale this successful business, and also apply its capabilities and expertise to help meet bp’s growing demand for low carbon power from our transition growth engines. I look forward to welcoming the Lightsource bp team to bp and am confident that together we can further strengthen its position as a leading global renewables developer.”

Meanwhile, the buyer continues to search for a new CEO. Former BP CEO Bernard Looney resigned in September 2023 amid a probe into his personal contact at the energy company.

Clean Energy Investments, Business Valuations: Under Pressure

The deal surfaces during a difficult time for the clean energy sector. Although renewable energy consumption continues to grow, the cost to finance and deploy clean energy infrastructure has skyrocketed. Indeed, rising interest rates, manufacturing and supply chain hurdles have pressured clean energy business valuations. The evidence: The S&P Global Clean Energy Index has fallen 30% from January through November 2023, The Wall Street Journal reported.

Despite the short-term headwinds, hundreds of startups, investment firms and governments continue to bet heavily on clean energy infrastructure deployments. For instance, the United Arab Emirates plans to start a $30 billion climate fund with BlackRock, Brookfield Asset Management and TPG, Bloomberg reported.

Regional investments also continue. For instance, Resolve Ventures, an Irish development and growth capital fund management company, has launched a €30 million Climate Impact Fund. The fund will support early-stage tech start-ups in Ireland dedicated to addressing the climate crisis.