Here’s how a new program will fund more multifamily solar projects in California

california multifamily solar program

Multifamily housing is one of the most complicated segments for the solar industry given the competing interests of tenants and owners. California, usually the first state to do everything in solar, is trying to make this easier with a new program.

The California Public Utilities Commission (CPUC) approved of a new Solar on Multifamily Affordable Housing (SOMAH) program for low-income apartment tenants in December. The goal is provide direct benefit to the tenants from the solar systems on their apartment’s roofs.

“Usually, affordable housing apartment owners pay for the electricity used in the complex’s common areas, not the individual units. Solar PV systems installed on these properties are typically only used to offset electricity in these areas. The property owners receive the savings directly, not the ten-ants. The SOMAH program will now also offset the tenants’ individual utility bills,” says Luciana Da Silva, Adroit Energy’s Director of Marketing and Corporate Development.

This $1 billion program will provide up to $100 million annually for up to 10 years, between 2016 and 2026.  The overall target is to install at least 300 megawatts (MW) of generating capacity on qualified properties by 2030. The program is set to begin August 2018.

Although the AB 693 (Eggman, 2015) Program Administrator and bill verbiage still need to be ironed out, Adroit identified these as the major key points for owners and tenants:

How Will Tenants Directly Save from Solar?

Low-income tenants will receive credits on utility bills through tariffs, namely virtual net metering (VNEM) tariffs. VNEM tariffs provide a mechanism for allocating bill credits from system generation among the property occupants, including both common area electric accounts and the accounts of tenants.

Under SOMAH, tenants receive at least 51% of the VNEM credits from any solar project.

What’s in it for the Property Owners?

SOMAH does not exclusively help the tenants. The bill will allow 49% of VNEM tariffs to flow to common areas. This split will provide the maximum flexibility to property owners to tailor their pro-jects to their particular circumstances.

Additionally, AB 693 authors emphasize the significant value to retaining common area Time of Use (TOU) rate requirements in order “…to encourage property owners to participate in additional ener-gy efficiency, demand response, and other energy management activities.”
Solar systems owners will still be eligible to receive the 30% Federal Incentive Tax Credit will be available when owner’s purchase the system.

Which Affordable Housing Properties Qualify for SOMAH?

• The property must be located in a designated disadvantaged community as identified by the California Environmental Protection Agency (CalEPA)… Or at least 80 percent of the house-holds in the building must have household incomes at or below 60 percent of the area medi-an income
• Units must be separately metered and eligible for a virtual VNEM tariff.
• It must be an existing building
• The installed solar system must produce at least 1 kW of electricity, and not more than 5 MW, alternating current rated peak electricity.
• Your utility providers must be Pacific Gas and Electric Company, San Diego Gas & Electric Company, Southern California Edison Company, Liberty Utilities Company, and PacifiCorp Company.
• There must be at least 10 years remaining on the term of the property’s affordability restrictions.

Property Owners Cannot Hike Up the Rent

Property owners are required to sign a contract to ensure no additional costs for the system will be passed on to low-income tenants at the properties. This includes increased rents, adjustments to utility allowances, or other mechanisms. Owners must demonstrate 100% of the economic benefits of the system’s generation will be reserved for tenants through the life of the system.

The rule also applies to third-party system owners, whom must also “…provide ongoing operations and maintenance of the system, monitor energy production, and kWh production levels projected for the system are achieved.”

Ensures Job Training and Local Hiring

The commission will develop local hiring plans to promote economic development in disadvantaged communities and job training requirements similar to those currently in place for the MASH program. In addition, program service providers must produce economic benefits by providing job opportunities to residents of disadvantaged communities.

 

— Solar Builder magazine

Shell gets into U.S. solar industry with latest acquisition

Shell Solar panels

Shell acquires interest in U.S solar company Silicon Ranch. Progresses our New Energies strategy and provides our U.S. customers with additional solar renewable options. (PRNewsfoto/Shell)

If you can’t beat ’em, acquire ’em. Shell is expanding its reach into renewable energy, signing an agreement to acquire a 43.83 percent interest in U.S. solar company Silicon Ranch Corp. from funds managed and/or advised by Partners Group. Consideration for the shares is between $193 and $217 million contingent on Silicon Ranch achieving predetermined milestones. A separate agreement with Silicon Ranch will give Shell the possibility to increase its ownership after 2021. Subject to regulatory approvals, the transaction is expected to close in Q1 2018.

“Partnering with Silicon Ranch Corporation progresses our New Energies strategy and provides our U.S. customers with additional solar renewable options,” said Marc van Gerven, Shell Vice President of Solar. “With this entry into the fast-growing solar sec-tor, Shell is able to leverage its expertise as one of the top three wholesale power sellers in the U.S, while expanding its global New Energies footprint.”

This investment is part of Shell’s New Energies power portfolio, which prioritizes low carbon generation and storage. Shell’s interest in Silicon Ranch includes an existing portfolio of approximately 880 megawatts of projects in operation or contracted.

Who is Silicon Ranch? Based in Nashville, it specializes in full service development of commercial and utility-scale projects, building over 2.5 gigawatts of conventional and renewable generation assets, including the first large-scale solar projects in Tennessee, Georgia, Arkansas, and Mississippi.

— Solar Builder magazine

Mercom: Strong Q4 pushes overall solar funding higher in 2017

The year-end solar installation reports for the U.S. were a bit of a downer, but private funding in solar across the globe is up year over year, according to Mercom Capital Group’s 2017 Q4 and annual report on funding and merger and acquisition (M&A) activity for the solar sector. Total global corporate funding into the solar sector, including venture capital/private equity (VC), debt financing, and public market financing came to $12.8 billion (B), compared to $9.1B raised in 2016.

“A strong fourth quarter pushed overall funding higher in 2017. Higher installation levels around the world, the lack of threat to the solar investment tax credit, lower than expected tariff recommendation by U.S. ITC, strong debt financing activity, and over a billion dollars in securitization deals helped the solar industry have a much better year in terms of financial activity compared to 2016. After several challenging years, most of the solar securities were up in 2017 reflecting overall positive sentiments around the solar industry even as several Chinese manufacturers decided to go private. Of course, all this could change swiftly if President Trump decides to impose higher tariffs in the trade case,” commented Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.

View the full report here.

Solar VC Funding 2017

Global VC investments came to $1.6B in 99 deals in 2017, up from $1.3B in 78 deals in 2016.
Solar downstream companies accounted for $1.4B in 2017. Thin-film companies raised $106 million (M), service providers raised $47M, PV technology companies raised $40M, Balance of Systems (BoS) companies raised $36M, concentrated solar power companies raised $8M and concentrator photovoltaics companies received $6M.

Mercom solar corporate funding

The top VC/PE deals reported in 2017 were all over $100M. Five of the top six VC funding deals came from India. 162 VC/PE investors participated in funding rounds in 2017, eight with multiple rounds: Engie, Avista Development, DSM Venturing, InnoEnergy, Innogy, International Finance Corporation, Shell, and Techstars.

Public market financing in 2017 reached $1.7B in 33 deals. Three IPOs were logged in 2017 for $363M: Canadian Solar Infrastructure Fund, New Energy Solar Fund, and Clenergy. Debt financing totaled $9.5B in 2017. There were six securitization deals in 2017 totaling $1.3B. For the first time, securitization deals surpassed $1B.

Solar Top 5 M&A Transactions in 2017

Announced large-scale project funding in 2017 reached $14B in 167 deals, compared to $9.4B in 133 deals during 2016.

A total of 161 investors funded about 20.5 GW of large-scale solar projects in 2017 compared to 5.9 GW funded by 153 investors in 2016. The top investors in large-scale projects included Clean Energy Finance Corporation (CEFC), Santander, Commonwealth Bank of Australia, and Siemens Financial Services.

$2.4B was raised by 16 residential and commercial solar project funds in 2017, compared to $4.9B by 30 funds in 2016. Since 2009, solar residential and commercial funds raised more than $24.8 billion.
There were 71 corporate M&A transactions in 2017, solar downstream companies accounted for 51. The largest was the $1.6B acquisition of FTP Power (sPower).

There was a record 228 large-scale solar project acquisitions in 2017 for more than 20.4 GW.
Mercom tracked 922 large-scale project announcements world-wide totaling 50.1 GW in 2017.

— Solar Builder magazine

Mercom: Strong Q4 pushes overall solar funding higher in 2017

The year-end solar installation reports for the U.S. were a bit of a downer, but private funding in solar across the globe is up year over year, according to Mercom Capital Group’s 2017 Q4 and annual report on funding and merger and acquisition (M&A) activity for the solar sector. Total global corporate funding into the solar sector, including venture capital/private equity (VC), debt financing, and public market financing came to $12.8 billion (B), compared to $9.1B raised in 2016.

“A strong fourth quarter pushed overall funding higher in 2017. Higher installation levels around the world, the lack of threat to the solar investment tax credit, lower than expected tariff recommendation by U.S. ITC, strong debt financing activity, and over a billion dollars in securitization deals helped the solar industry have a much better year in terms of financial activity compared to 2016. After several challenging years, most of the solar securities were up in 2017 reflecting overall positive sentiments around the solar industry even as several Chinese manufacturers decided to go private. Of course, all this could change swiftly if President Trump decides to impose higher tariffs in the trade case,” commented Raj Prabhu, CEO and Co-Founder of Mercom Capital Group.

View the full report here.

Solar VC Funding 2017

Global VC investments came to $1.6B in 99 deals in 2017, up from $1.3B in 78 deals in 2016.
Solar downstream companies accounted for $1.4B in 2017. Thin-film companies raised $106 million (M), service providers raised $47M, PV technology companies raised $40M, Balance of Systems (BoS) companies raised $36M, concentrated solar power companies raised $8M and concentrator photovoltaics companies received $6M.

Mercom solar corporate funding

The top VC/PE deals reported in 2017 were all over $100M. Five of the top six VC funding deals came from India. 162 VC/PE investors participated in funding rounds in 2017, eight with multiple rounds: Engie, Avista Development, DSM Venturing, InnoEnergy, Innogy, International Finance Corporation, Shell, and Techstars.

Public market financing in 2017 reached $1.7B in 33 deals. Three IPOs were logged in 2017 for $363M: Canadian Solar Infrastructure Fund, New Energy Solar Fund, and Clenergy. Debt financing totaled $9.5B in 2017. There were six securitization deals in 2017 totaling $1.3B. For the first time, securitization deals surpassed $1B.

Solar Top 5 M&A Transactions in 2017

Announced large-scale project funding in 2017 reached $14B in 167 deals, compared to $9.4B in 133 deals during 2016.

A total of 161 investors funded about 20.5 GW of large-scale solar projects in 2017 compared to 5.9 GW funded by 153 investors in 2016. The top investors in large-scale projects included Clean Energy Finance Corporation (CEFC), Santander, Commonwealth Bank of Australia, and Siemens Financial Services.

$2.4B was raised by 16 residential and commercial solar project funds in 2017, compared to $4.9B by 30 funds in 2016. Since 2009, solar residential and commercial funds raised more than $24.8 billion.
There were 71 corporate M&A transactions in 2017, solar downstream companies accounted for 51. The largest was the $1.6B acquisition of FTP Power (sPower).

There was a record 228 large-scale solar project acquisitions in 2017 for more than 20.4 GW.
Mercom tracked 922 large-scale project announcements world-wide totaling 50.1 GW in 2017.

— Solar Builder magazine

Solar among the projects in NV Energy’s latest RFP for renewable projects

NV ENERGY solar

NV Energy issued a request for proposals that could add up to 330-MW of new renewable energy projects in Nevada. This additional commitment to renewable energy, which includes the potential integration of battery energy storage systems, will provide enough carbon-free electricity to power approximately 200,000 Nevada homes.

NV Energy requests that all parties interested in becoming a bidder for this opportunity should register on the company’s website right here and follow each of the directives under the “Steps to Complete” section of the website. Bids are due February 2, 2018.

Since 2009, NV Energy has more than tripled its in-state renewable energy production and its electricity prices today are 15 percent lower than they were at that time.

“We expect these new projects to provide some of the lowest-cost renewable energy available in the market, which will directly benefit our customers. In fact, adding these new renewable projects serves to diversify the portfolio we use to provide power across the state and protects against the risk of increases in the price of natural gas used to generate electricity,” said “As important as this opportunity is to further the state’s desire for clean energy, equally important is that we expect to deliver these renewable projects to customers without increasing rates,” said NV Energy’s President and Chief Executive Officer Paul Caudill.

The request for proposals seeks solar, geothermal, wind, biomass and biogas technology projects that are compliant with Nevada’s existing renewable portfolio standards. NV Energy will also, for the first time, consider adding supplemental battery energy storage systems that are integrated with the proposed renewable energy resource. Projects will be competitively evaluated on a number of factors, including best value to customers of NV Energy and creation of economic benefits to the State of Nevada.

“Renewable energy projects like these result in employment of construction trades and create longer term operations and maintenance opportunities,” Caudill stated.

He noted that the company is ultimately driving to become 100 percent renewable, but the shorter-term goal is to double its renewable energy delivery to customers by 2023.

— Solar Builder magazine