This new partnership will help nonprofits go solar

Roadrunner Food Bank

Our Project of the Year for 2017 was one such project.

CollectiveSun, the only company dedicated exclusively to helping nonprofits and tax exempt organizations fund solar projects, is teaming up with EnergySage, an online comparison-shopping marketplace for solar. This collaboration creates a powerful new solution that allows nonprofits and tax exempt entities to seamlessly navigate the solar purchasing and financing process.

The CollectiveSun-EnergySage partnership removes the hurdles that nonprofits and tax exempt organizations have historically had in both financing their solar panel installation and in locating high quality, pre-screened solar installers. Now, nonprofits and tax exempt organizations will all be able to take advantage of solar energy.

CollectiveSun has revolutionized funding for nonprofits and tax exempt organizations by providing a prepaid power purchase agreement (PPA). This proprietary financing method allows the company to utilize solar tax benefits that would otherwise be lost and pass the savings onto the nonprofit buyer in the form of a 15 percent reduction in the cost of a new solar panel system. CollectiveSun also offers assistance and a variety of methods to help provide the upfront capital for its prepaid PPA, including a proprietary CrowdLending campaign.

This innovative financing model will now be available to nonprofits and tax exempt organizations that register on EnergySage. Backed by the U.S. Department of Energy, EnergySage is the country’s largest online comparison-shopping marketplace for solar, and each year matches thousands of nonprofits with its network of over 500 vetted solar companies. EnergySage’s impartial information and competitive bidding platform helps solar shoppers make more informed decisions and save up to 20 percent on their solar installation costs.

“CollectiveSun is always looking for ways to deploy more solar,” said Todd Bluechel VP of Marketing and Sales for CollectiveSun. “The CollectiveSun-EnergySage partnership was formed to help broaden and strengthen both companies’ ability to deploy more solar and even though this partnership is a win-win for both, it’s particularly beneficial for the 1.5 million nonprofits nationwide who have been seeking ways to afford solar.”

“Installing solar panels is a great way for tax exempt organizations to reduce operating costs and simultaneously benefit the environment,” said Aaron James, Vice President of Network Partnerships at EnergySage. “Whether you run a school, food bank, church, or other mission-based organization, the EnergySage-CollectiveSun partnership offers a new way to make an even larger impact by switching to clean, renewable energy. We’re up and running and actively accepting new registrations.”

To get started, nonprofits and tax exempt organizations can head here for more.

— Solar Builder magazine

Drive more commercial solar projects with these new documents from SEIA

solect solar commercial install

Here’s a commercial install from Solect Solar.

Commercial solar has a ton of potential, and the Solar Energy Industries Association (SEIA) wants to make that potential clearer for customers and investors, today making two documents available to spur investment.

The first document is a contract that combines the benefits of a Power Purchase Agreement (PPA) with Property Assessed Clean Energy (PACE) to provide customers with a valuable new financing option.

“The PACE PPA further builds out SEIA’s suite of model contracts so all solar transactions can be efficiently negotiated and financed,” said Mike Mendelsohn, SEIA’s senior director of project finance & capital markets. “Our goal is to broadly open the U.S. commercial real estate sector for solar deployment, and the PACE PPA is a valuable tool to allow that progress to happen.”

You can learn more about these financing plans here.

The second document, co-authored by SolarKal, is an educational report designed to explain the value of on-site solar to commercial property owners. According to the report, Solar Energy and Commercial Real Estate (CRE): Insights for Your Investment Property, solar systems can allow commercial property owners to raise rents, lower operating expenses, negotiate lease extensions, and increase the net present value, or NPV, of their buildings.

Both documents were developed by SEIA’s C&I Working Group, which is focused on creating solutions for the commercial and industrial sectors.

Download the PACE PPA document here.

— Solar Builder magazine

Pennsylvania retirement community expands solar PV capacity to 2 MW

Elizabeth town solar

Masonic Village at Elizabethtown, Pa., is in the midst of constructing a 2 MW solar system, adding to an existing 1 MW solar array. Once the project is complete in February, after more than a decade of investing in clean energy, the not-for-profit continuing care retirement community will produce 23-25 percent of its electricity using a mix of solar panels and microturbines. The array will be one of the largest solar arrays of any retirement community in the United States, and it will save Masonic Village $250,000 annually in electricity costs.

“This project enables Masonic Village to build upon its existing infrastructure, and over time, see a positive rate of return, while also meeting our goals to be more energy efficient,” Patrick Sampsell, chief environmental and facilities officer, said. “The cost savings help offset the declining reimbursements Masonic Village receives for care and services as part of its charitable mission.”

The expansion will produce 2.2 million kWh per year and is expected to save $200,000 a year in electricity costs. In 2011, Masonic Village constructed a 1 MW ground-mounted solar photovoltaic system, which produces approximately 1.2 million kWh of electricity per year and results in costs savings of between $40,000 and $60,000 annually. Combined with the new addition, the system will produce approximately 15 percent of the campus’ electricity, and generate a rate of return of between 14 and 20 percent.

2017 Solar Builder Project of the Year Winners

As part of a production sharing agreement with Solar Renewable Energy LLC, Masonic Village will invest approximately $1.8 million in the expansion over six years. Solar Renewable Energy will finance the remainder of the project costs and will remain the owner of the array for six years, after which Masonic Village will have the option to purchase the system.

After completing an energy benchmarking study last year, Masonic Village determined that energy costs between 2009 and 2015 decreased by 15 percent while the campus grew by 9.4 percent. Microturbines currently generate 10 percent of the campus’ electricity. The heat created as a by-product of the microturbines, in turn, heats water for a portion of resident apartments and the Masonic Health Care Center, reducing the use of gas boilers. Five microturbines were installed in 2002 (with a sixth added in 2010) and upgraded in 2007. The turbines reduce emissions by as much as planting 1,000 acres of forest per year.

Clean energy is part of Masonic Villages’ four-legged energy efficiency plan, the other legs being conservation, efficiency and smart technology. Other efforts include the use of environmentally-friendly materials and methods at all five of its Pennsylvania campuses, including water and electricity-saving fixtures, co-generating electricity, motion detector-controlled lights and the purchase of hybrid vehicles for company use. Staff constantly evaluate new technologies, such as solar light tubes and LED replacements for standard streetlights.

— Solar Builder magazine

Solving C&I Solar: How boutique financing is growing this underserved solar segment

C&I Solar

Boutique financiers armed with massive databases and complex algorithms are changing the way that small commercial and industrial (C&I) solar projects get financed. Typically targeting projects under 250 kW, these financiers have automated and accelerated as much of the underwriting chore as possible. The result is that old back-office costs largely have disappeared, making a small C&I loan possible, and even lucrative for certain classes of investors.

“For C&I net metering deals, there likely will be a $5 billion to $6 billion market this year. If there is an avoided cost of power that is more than 10 cents/kWh, there is likely to be a workable deal. Our installers say C&I is where they see all the growth,” says Dustin Keele, founder of SolRates, based in Silicon Valley. His company finances in all 50 states.

This market is also huge in terms of number buildings. “About 90 percent of all U.S. commercial buildings have square footage below 25,000 sq ft. Using 10 watts per sq ft for a density average, you can install a 250-kW system on these buildings,” says San Francisco-based Braggawatt founder Trey Ramsey. “When you focus on systems bigger than 250 kW, then you will find a higher concentration of blue chip companies, which have plenty of borrowing options.”

“We calculate that the medium U.S. business needs a $175,000 system,” says Bryan Birsic, the CEO of Boulder, Colo.-based Wunder Capital.

All of these boutique financiers say they want to see businesses save at least 10 percent off their utility bill. In states like New Jersey, however, with strong SREC markets, the savings can go up to as much as 50 percent.

Crushing the Underwriting Barrier

Most banks are not interested in considering a solar C&I deal for less than $5 million, these financiers say, since the labor cost of their staff of underwriters makes anything under that size unprofitable. But using a series of information tools, including business financials, tax documents and credit rating agency records, these financiers can generate a yes or no response in very little time, eliminating 90 percent of the time and effort that a team of staff underwriters might expend to reach a decision.

“We have hundreds of data fields automated,” Birsic says. “No one can compete with us in this space unless they have a high-technology platform.”

These small lenders also have adopted standardized and proprietary contracts to eliminate lawyer review and cost. The industry is likely to move toward a single C&I contract format in a few years’ time.

“One thing that’s nice about 250-kW-and-under systems is that they are not much more technically complex than a residential system, yet they can be many times larger,” Ramsey notes. His finance platform version 2.0 was recently released with some 600 installers and other players in its database. “It’s one of the final frontiers for solar,” he says.

Operating Leases Popular

If a business is not able to use the ITC benefit, or is willing to forego it, the project becomes that much easier to place. An operating lease, in which the lessee does not own the system until all payments are made and a buyout is paid, is one popular mechanism.

“Operating leases assign the tax credits and depreciation benefits to the bank, so effective interest rates can be negative,” Keele says. “For instance a $500,000 system might have $425,000 in lease payments including the system buyout payment at the end of seven years.”

The SolRates system (free for installers to use) simplifies these equations.

“Once the data is loaded, SolRates provides instant online financing options, where our algorithm finds the optimal lender and financing structure for the deal,” he says. Some of these financiers make their money by originating the leases or loans for an institution that will hold it and use the associated ITC benefit. Others work the margins the good old way.

Broadening Investor Base

Apart from small banks and credit unions, small C&I loans are frequently funded by private equity, be the investor an individual, a family office, a financial adviser or a foundation.

“Business owners going solar with our financing can and frequently do achieve ROIs of greater than 10x on their out of pocket capital,” Keele says.

Wunder Capital packages its own term investment products from the various loans it closes. The company’s Term Fund pays 8.5 percent for the seven-year instrument; the minimum investment is as little as $1,000. In its end-June mid-year review, Wunder reported funding 53 projects this year to date, with the majority involving Term Fund investors.

One risk mitigating factor in private equity investing is the higher quality of warranties, Birsic says. Some lesser known manufacturers have secured these via third parties specialized in the product. While Tier 1 manufacturers tend to service the warranties from their balance sheet, the practice of re-insuring warranty risk has accelerated. Not every solar manufacturer open for business today can safely be assumed to be in business in seven years.

Seven-Year Loan Demand to Grow

Loans for purchased C&I systems are rapidly emerging as the popular financing tool for the segment. Even with seven-year terms, the buyers can save money along the way.

“The loan rates that customers pay can vary depending on their credit: If it’s good, high 5 percent or low 6 percent is typical. If it’s less good, then mid-7 percent,” Keele says.

The complexity of the loan tends to go up with value. “Our focus is toward the lower end, so for a 100-kW deal, it may only be worth $200,000. But for a 1-MW deal, worth $2 million, it may be a very different set of conditions,” Ramsey says.

The financiers agree that as the ITC dwindles away, there will be more loans to the small C&I segment than operating leases.


SPI debut: The Braggawatt Energy platform

Efficiently financing small- and medium-sized businesses is the solar industry’s white whale. At SPI, Braggawatt Energy is officially launching its new platform, specifically built to address these needs. How? What they are calling a partner-driven model designed for simple navigation, creation of financing proposals and automation of credit reviews and financing contracts to implement reliable onsite energy solutions that uniquely address the needs of SME customers.

“Unlike disjointed software platforms or standalone financing providers, Braggawatt’s platform streamlines the origination, development and financing of distributed energy solutions for SMEs,” said Trey Ramsey, co-founder and CEO of Braggawatt.

“We connect the dots between local installers, solar-ready businesses and the financing necessary to make it all happen,” Oleg Popovsky, Braggawatt’s co-founder and CCO, added.

Charles W. Thurston is a freelance writer who covers solar energy from Northern California.

— Solar Builder magazine

West Hills Construction to develop 20-MW of rooftop solar tracker projects

West Hills Construction, a fourth-generation family owned design/build general construction firm, is developing up to 20 MW of commercial and industrial rooftop solar projects utilizing Edisun’s rooftop tracking technology, PV Booster. The first project developed under this partnership is a 1 MW solar array installed on 368,000 square feet of a 528,000 square foot cold storage industrial building in Oxnard, Calif. The project utilizes more than 2,900 trackers, making it the world’s largest rooftop tracker installation.

Edsiun Microgrids_Chiquita_WestHills_Installation

PV Booster is the only dual-axis rooftop solar tracker specifically designed to meet the needs of C&I building owners and solar developers. By tracking the sun throughout the day, Edisun says PV Booster increases energy production by 30 percent and enhances project economics by 20 percent when compared to conventional fixed-tilt installations.

“The West Hills team is dedicated to finding and implementing technologies that meet our impeccable standards for craftsmanship while improving our customers’ bottom lines,” said Rusty Wood, vice president, West Hills Construction, Inc. “Over the last decade we have explored numerous solutions that promise to optimize rooftop solar at the commercial and industrial scale. PV Booster is the only technology actually able to accomplish this objective, and we’re excited to share it with our customers.”

 

“Partnering with a visionary company such as West Hills, which has built more than 10 million square feet of real estate and is an expert in construction and solar installation, is the first of many exciting growth milestones for Edisun,” said Bill Gross, chief executive officer, Edisun Microgrids, Inc. and founder, Idealab. “PV Booster’s technology fundamentally improves the economics of rooftop solar for developers, installers, building owners, and tenants, which aligns with our core mission to revolutionize the economics of solar. We believe this increase in the value of solar projects, such as Chiquita’s Oxnard installation, will be the catalyst for the widespread adoption of solar in the C&I sector.”

Project commissioning is expected in Fall 2017.

— Solar Builder magazine