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

Three takeaways from SEIA white paper on financing C&I solar with C-PACE

solar financing

The commercial and industrial (C&I) sector remains the biggest opportunity for solar, but also the most frustrating to finance. We looked at some boutique financing concepts in our Sept./Oct. issue, and last week the Solar Energy Industries Association (SEIA) and Alta Energy jointly released a white paper highlighting an underutilized financing tool: Commercial Property Assessed Clean Energy (C-PACE). With C-PACE , a property owner can finance 100 percent of the cost of solar and/or energy efficiency upgrades as a voluntary property tax assessment on a commercial building for 10-30 years and can be easily transferred to new owners, the paper notes.

Here are three key takeaways from the report.

C-PACE financing immediately opens up C&I markets to solar that were unreachable through more traditional methods. States such as Florida, Kentucky, Minnesota, Arkansas, Missouri, Nebraska and Wisconsin that do not allow power purchase agreements (PPAs) but have working C-PACE programs. And even in states with thriving PPA deals, C-PACE financing can be a more appealing deal, allowing an owner to take advantage of tax incentives immediately.

C-PACE allows for all-encompassing energy efficiency plans to be bundled right along with the solar system. An example in the white paper is a 500-kW system that would not be cumulatively cash flow positive throughout the term of the loan, but with a $100,000 lighting retrofit project bundled into the financing package, the project stays positive while total project savings increases by $150,000. Seen here:

SEIA PACE financing solar

This same strategy is useful in states where a solar+storage system would make a huge impact in cutting peak demand charges.

C-PACE financing can also make a solar system attractive in situations where it made no sense previously — like an owner who does not pay the energy bills. Because C-PACE financing is tied to the property taxes, owners can pass the cost of the array onto the energy-consuming tenant. Poor credit is also not a factor, as we dove into in this article.

 

— Solar Builder magazine

California beefs up consumer protection for PACE financing

california PACE financing

California Governor Jerry Brown signed two bills into into law that provide a regulatory and consumer protection framework for Property Assessed Clean Energy (PACE) financing.

The companion pieces of legislation – AB 1284 and SB  – are the result of a year of development and negotiations among low-income consumer advocates, environmental and clean-energy groups, the banking industry, Renovate America and other private-sector PACE program administrators aimed at improving PACE by strengthening consumer protections.

Amisha Rai, Senior Director of California Policy at Advanced Energy Economy, said: “The PACE program is helping consumers and communities throughout California achieve greater energy savings while expanding access to advanced energy products and services. AB 1284 and SB 242 establish a clear, enforceable statewide consumer protection and regulatory framework for PACE that will serve as a model for other states. We are pleased to see California lead the way in passing this critical package.”

AB 1284 will significantly enhance PACE underwriting, regulate PACE at the state level, and enforce compliance with all PACE laws by PACE administrators and individual contractors.

Specifically, the bill will:

• Strengthen and standardize the current underwriting standards in PACE based on home equity and on-time mortgage and tax payment history; and require that the most accurate Automated Valuation Models are used for establishing the value of the home;
• Establish new underwriting standards predicated on income verification and ability-to-pay to determine that property owners can meet their annual PACE obligation in addition to their current debt obligations and basic household expenses; and
• Establish a licensing and regulatory framework for the PACE industry in California, which will be subject to oversight by the California Department of Business Oversight (DBO).

Financing beyond FICO: Using asset-backed loans, PACE to get solar deals done

 

The California Low-Income Consumer Coalition, made up of 11 consumer policy and legal advocacy organizations, worked to improve the legislation and says AB 1284 “introduces protections that have been absent from, and critically needed in, PACE programs.” The coalition moved from opposing the legislation to neutral, stating some reservations which the Department of Business Oversight will likely address in its regulatory process.

SB 242 will establish state-of-the-art consumer protections, further setting PACE apart from other forms of financing. Chief among these is the requirement that PACE providers conduct a recorded, live, confirmation of terms call with property owner before they sign their assessment contract, as a reinforcement to written disclosures modeled on the federal Know Before You Owe mortgage form. In addition, the law establishes data reporting requirements to local government partners, including data that speaks to the projected energy and water savings and local economic and job impacts, as well as on categories of products installed and homeowners served.

SB 242 also establishes an expanded “right to cancel” for a property owner using PACE, enabling the property owner to cancel their separate home improvement contract if they cancel their PACE financing within their three-day right to cancel. The law limits the amount of money that program administrators can pay to contractors, whether directly or indirectly, to the price charged by the contractor to the property owner. And it also prohibits the reimbursement of marketing, advertising, and program collateral expenses to restrict the usage of such reimbursement to evade the anti-kickback provisions.

— Solar Builder magazine

Solaria BIPV technology now available through CleanFund Commercial PACE financing

Solaria BIPV

Builiding Integrated Photovoltaics (BIPV) just got a little more affordable. CleanFund Commercial PACE Capital, formed a financing partnership with Solaria Corp. to offer long-term financing for its building skin technology. By providing commercial building owners access to Solaria’s customizable product line, along with the benefits and flexibility of C-PACE financing, this SolarPACE collaboration maximizes the availability of long-term incentives to developers who implement architectural solar  into commercial projects.

SolarPACE explained

SolarPACE is designed to maximize cash flow, with terms up to 30 years. It can solve most credit challenges found in commercial solar project financing, since C-PACE is secured by a parcel tax assessment with payments billed through ordinary property taxes. Owners often have the option to pass all or a portion of the C-PACE payments to tenants, who also benefit from lower energy costs. With flexible options to utilize solar tax credits, SolarPACE enables build-ing owners and developers to stay within project budgets and lower overall project costs.

Financing beyond FICO: Using asset-backed loans, PACE to get solar deals done

“Solaria is privileged to partner with the leading provider of a nationwide financing platform that makes building improvements affordable for commercial property owners,” said Udi Paret, GM Building Solutions, Solaria Corporation. “Now we can offer customers a viable option for funding and installing an architectural solar system, especially important for net zero energy projects. This is a significant competitive advantage for our industry partners who offer their own warran-tied ‘powered-by-Solaria’ architectural solar products.”

— Solar Builder magazine

HERO program ready to boost solar installs in Missouri

missouri pace solar hero program

More than 200,000 additional homes across Missouri now have access to the HERO Property Assessed Clean Energy (PACE) Program, which enables homeowners to make energy improvements and to pay for them over time through their property tax bills. HERO financing payments may have tax benefits, and many homeowners see immediate savings on energy bills by investing in efficiency or renewable energy upgrades.

Since the innovative program first launched in Jackson County, Missouri, in September, it has financed more than $1 million in energy and efficiency improvements across over 70 homes. HERO has just recently become available in:

• the City of North Kansas City (Clay County) as well as the Clay County and Platte County portions of Kansas City;
• the City of Arnold (Jefferson County);
• all of Franklin County;
• and in the following cities in St. Louis County: Ballwin, Berkeley, Black Jack, Crestwood, Charlack, Chesterfield, Ellisville, Eureka, Ferguson, Hazelwood, Olivette, Town and Country, University City and Valley Park.

RELATED: Financing beyond FICO: Using asset-backed loans, PACE to get solar deals done 

What’s the HERO Program?

The HERO Program, which is available to Missouri communities that join the Missouri Clean Energy District (MCED), addresses a problem conventional financing products have not solved. Each year, one in six homeowners replaces a system in the home that affects energy consumption. Most of the time, they choose a less efficient option based on upfront sticker price, instead of factoring in the total cost of owning and maintaining the product or system over the course of its useful life.

“HERO overcomes challenges that have slowed the adoption of energy efficiency and related technologies in our state,” said David Pickerill, executive director of MCED. “By financing only efficient solutions, HERO creates a golden opportunity to upgrade Missouri’s housing stock.”

HERO funds up to 100 percent of the home improvement, and HERO interest rates are fixed and competitive with other options. The term of the financing is based on the useful life of the product, up to 20 years, which spreads out the cost over time. Interest on HERO payments may be tax-deductible, and a recent study showed homes with PACE assessments recovered 100% or more of the investment at time of resale.

The HERO Program is run by Renovate America and MCED, which work in close partnership with cities and counties. Because of the nature of the public-private partnership, HERO financing includes additional requirements to protect consumers not found in other payment options like credit cards or home equity loans. For example, HERO will only pay a contractor after the homeowner signs off that the job has been completed to their satisfaction. Contractors must have a good track record, products and labor must meet competitive pricing standards, and homeowners select from products that meet government efficiency standards.

Contractors interested in offering HERO financing can register here.

— Solar Builder magazine