The team behind Candela Renewables has been at the forefront of US solar expansion since the technology was still on the margins of the California energy landscape. But a more extensive vision for the industry is now taking root in the scrublands of the American Southwest.

Candela and its capital partner, Spain-based Naturgy, are proposing to build the 2.25 GW Chill Sun solar project in the Amargosa Valley of southern Nevada, one of several sun-rich areas designated as solar energy zones by the federal government. If constructed as proposed, it would be among the largest solar installations to date in the US and rival some of the largest in the world.

Ample suitable land, high solar irradiance, and proposed transmission line expansions have made the Amargosa Valley and other Nevada solar energy zones a red-hot destination for developers seeking to take part in what is expected to be the fullest expression yet of the US solar industry’s potential. In more ways than one, it’s a microcosm of the ways in which market dynamics and regulators are opening new pathways for scale in solar.

And despite macroeconomic headwinds that are slowing development of solar and other renewables projects, Candela CEO Brian Kunz is bullish on the industry.

“I can’t imagine being in an industry that has stronger fundamentals in terms of its demand and growth than renewable energy in the US,” he says.

Connecting dots

Nevada utility NV Energy is building the Greenlink transmission line in two phases across the state’s north and west, while NextEra subsidiary Gridliance is proposing to build the Silverado Renewables Connection, a three-phase project that would upgrade and expand transmission lines in southwestern Nevada and California.

The new transmission capacity will open vast areas of the Nevada desert for solar development, allow more renewable energy exports into California, and reinforce the system for deliveries between booming Reno in the North and Las Vegas in the South.

“Solar projects on the Greenlink line will be able to reach customers in the north or south — and the line primarily goes through public land, which most of Nevada is,” says Kunz. “The federal government explicitly supports siting renewable energy on public lands.”

The federal Bureau of Land Management has designated five solar energy zones in Nevada — the most of any state — while Utah, Arizona, and California have three zones.

Candela’s Chill Sun project, which is expected to include a storage component, would sit within a study area of roughly 26,300 acres of BLM-managed land, 14 miles north of Beatty, Nevada. Construction is slated to begin in 2025 and the project would become operational in September, 2027.

In addition to Chill Sun, a flood of solar developers have filed for approval of colossally sized projects with Nevada’s utility regulator.

“One of the biggest issues in Nevada is transmission, and so hopefully Greenlink can solve some of that,” says Tommy Greer, chief commercial officer at Arevon, a solar developer that operates in the western US and has several projects in Nevada.

However, while NV Energy has expressed confidence in its ability to finish the first phase of the Greenlink project by 2026, the propensity of transmission line construction to fall behind schedule should inject a dose of caution for developers seeking to advance projects there.

“If we're talking about getting projects contracted and built in Nevada rather than projects that are just a parcel of land and a dream, I think we will need to see more progress on Greenlink before it specifically drives transactable projects,” Greer says.

Starting out

Within Candela, the C-suite duo of Kunz and CFO Nikolas Novograd embodies the combination of development finesse and larger capital structures that has swept the renewables industry and helped propel ambitious projects such as Chill Sun.

Kunz and Novograd first met almost 14 years ago when Kunz, an engineer by trade, was developing projects and Novograd, a finance executive, was helping finance them. In 2008, Kunz co-founded NextLight Renewable Power and Novograd was recruited to be its head of finance by private equity backer Energy Capital Partners.

At the time, the largest solar plant in the US was a 14 MW facility located within Nellis Air Force Base, northeast of Las Vegas. NextLight soon had power purchase agreements in place with Pacific Gas & Electric for its 230 MW AV Solar Ranch 1 and the 290 MW Agua Caliente project.

“The demand only existed in California to support those projects at the time,” Kunz says.

Just over two years later, ECP sold NextLight — which had grown to become the “largest pure-play utility-scale developer of solar power plants in the US” — to solar manufacturer First Solar. Kunz took on a development role there while Novograd eventually moved on to a tax equity role at Wells Fargo.

While at First Solar, Kunz helped oversee the development of what are still today some of the largest operational solar projects in the US: Topaz and Sunlight, both in California and registering 550 MW each.

“The projects were infinitely scalable,” Kunz says. “We just saw an opportunity for renewables to really explode as an industry. The technologies that we deployed were being used in Europe but not at the scale that they could be deployed in the US. … We did push the boundaries.”

Corporate and capital influx

Another project overseen by Kunz while at First Solar, the 280 MW California Flats power station, was built on land owned by the Hearst family and powered all of Apple’s load in California at the time.

Kunz cites this influx of corporations seeking renewable energy as the aspect of the market that has changed most since the early days when state-mandated renewable energy standards drove procurement from power utilities.

“Companies I don’t even recognize by name anymore are wanting to enter the market and buy renewable energy,” he says. “I think that’s a big driver of scale in the industry.”

Novograd, meanwhile, cites the stream of large renewables investments as the factor that has allowed the sector to scale up. “Utility-scale development is expensive,” he says, noting the large and timely distributions of capital required in different stages, from signing a PPA to applying for interconnection approval to project construction.

Kunz and Novograd reunited in 2017 to form Candela and secured backing from Macquarie in 2018. After Macquarie’s exit last year, Candela formed a partnership with Naturgy, a deep-pocketed Spanish multinational energy company, in a deal that included the sale of solar and storage development platform Hamel Renewables.

Candela works exclusively for Naturgy via a partnership agreement and a development services agreement. “We are their only source of solar projects in the US,” Kunz says. “The intent is for them to acquire and construct and then be the long-term owners of all the solar projects that we develop.”

Unlike other renewables developer transactions in recent years, however, Candela remains self-owned following the Naturgy transaction.

“One of the things that we all learned from Nextlight being sold to First Solar is that when you’re owned by private equity you don’t really have control over who your buyer is going to be and what things are going to look like once you’re acquired,” says Novograd. “For some of us, being part of a manufacturing company, and a much bigger company, wasn’t ideal.”

The arrangement with Naturgy gives Candela access to a pool of capital that frees up resources for the team to focus on development, Novograd says. “For us, being able to focus on what we’re good at doing and love doing, and not having to focus on raising capital, is perfect.”

Regulatory challenges

The solar projects proposed since 2021 on BLM-managed land in Nevada alone represent 29.5 GW of generation capacity. For comparison, the sum of all wind, solar and geothermal projects the agency permitted in the entire US as of November 2021 adds up to 12 GW.

Meanwhile, the attempt by the Trump administration to re-locate BLM’s national headquarters to Colorado resulted in a loss of institutional capacity, with around 87% of its Washington, DC-based staff leaving the agency, according to a government report.

A BLM press officer did not respond to questions about how its western offices were impacted by the relocation. The agency instead last week released a report saying that, from 2017-2020, BLM did not have enough staff to “keep pace” with the renewable energy workload, but that it increased renewable energy permitting activities by 35% in 2021 compared to the previous year.

The BLM report shows 100 proposed projects on public land as of December, 2021:

Kirsten Cannon, a spokeswoman for BLM in Southern Nevada, says that her office has 30 pending large-scale renewable energy applications, and has prioritized a shortlist of projects such as First Solar’s Copper Rays Solar project, which was recently given BLM approval to move into the NEPA process.

A second BLM report released last week identifies potential improvements to electrical transmission corridors across 11 contiguous Western states.

Meanwhile, a wider realignment of the fragmented Western power grid could provide a more liquid market for solar and other renewable energy developers. There are multiple efforts underway to develop a Western market, but there is no coordinated voice to propel momentum, said Carolyn Barbash of NV Energy in remarks last year before federal regulators.

“In the West, you are generally constrained to the entity that you interconnect to,” says Arevon’s Greer. “In Nevada it happens to be NV Energy. It’s not a fully liquid market right now. It is a bilateral market, like a lot of the states.”

Your own supply

The quest for a new level of scale in the US solar industry has run up against supply chain bottlenecks, materials cost inflation, and the uncertainty of a US Department of Commerce investigation into the provenance of solar panels from four Southeast Asian nations.

A recent survey conducted by the Solar Energy Industries Association shows that 78% of responding US developers are experiencing cancelled or delayed PV modules, while 56% said at least 70% or more of their current-year solar pipeline is at risk.

Candela, for its part, plans to break ground on several projects as soon as this year, according to Kunz, who says macroeconomic pressures have slowed the company’s project timelines.

“Candela and Naturgy have been steadily adjusting to the current reality” — longer shipping times, higher prices and the threat of higher tariffs — “and to date there is no major impact on our pipeline, though obviously costs are higher, and some construction schedules have been moved out,” Kunz says.

Naturgy’s international reach, meanwhile, allows it to spread procurement risk across multiple global regions and secure equipment for Candela’s US projects while other US developers may need to pause procurement, he says.

An additional advantage that Naturgy brings, Kunz says, is the long-term perspective of the market. “We have an investor that has a willingness to commit capital during the development cycle and the patience to wait for that investment to mature, and then ultimately a long-term owner of the asset that they’re going to own for 20, 30, 40 years,” he says.