Electrified powertrain solutions provider, XL Fleet, announced the acquisition of Spruce Power, an owner and operator of residential rooftop solar systems in the U.S.

XL Fleet completed the acquisition from funds managed by HPS Investment for a total cash consideration of approximately $58 million and the assumption of $542 million of debt.

Through leveraging the Spruce Power platform, XL Fleet intends to grow its revenues by providing subscription-based solutions for rooftop solar, energy storage, EV charging, and other energy-related products to homeowners and small businesses.

“Demand for distributed generation and electric vehicles continues to grow as consumers and businesses seek to mitigate the impact of rising energy costs and become more sustainable. Subscription-based services that make it easy for homeowners and small businesses to own and maintain rooftop solar, battery storage, and electric vehicle charging systems are in high demand. The subscription model allows consumers access to new technology without making a significant upfront investment or incurring maintenance costs while enabling the service provider to earn recurring revenues over a long period of time and generate attractive returns on capital. Spruce Power is a longstanding leader in providing solar-as-a-service solutions and is playing a major role in helping consumers to reduce their energy costs and make meaningful contributions to decarbonizing the electricity grid,” said Eric Tech, Chief Executive Officer of XL Fleet.

Headquartered in Houston, Texas, Spruce Power owns and operates more than 52,000 residential rooftop solar systems. The company sells the power generated by its systems to homeowners under long-term agreements that obligate the company’s subscribers to make recurring monthly payments. They generated revenues, net income, and Adjusted EBITDA of approximately $83 million, $15 million, and $51 million, respectively, for the twelve months which ended June 30, 2022.

Last week, BBoxx, a designer, manufacturer, distributor, and financer of plug & play solar systems, acquired PEG Africa, a provider of distributed energy in West Africa. This deal gives Bboxx access to ten new markets, including Senegal, Ivory Coast, Ghana, and Mali.

According to Mercom’s 1H and Q2 2022 Solar Funding and M&A Report, in 1H 2022, there were 53 solar M&A transactions compared to 54 transactions in 1H 2021.