Creative Solar Finance Grows the Pool of PV Investors and Customers

April 28, 2015
Conergy and Demeter Power are launching a solar financing structure that will open up commercial solar to the 90 percent of commercial rooftops currently ineligible. While banks can gauge the creditworthiness of consumers by assessing their FICO scores, and larger commercial players are investment-grade, smaller commercial customers are closed out of financing solar rooftops. According to a release, "Financiers have not been comfortable taking on the credit risk of funding small commercial systems under a long-term lease or PPA agreement." Renew Financial (formerly Renewable Funding) can use the property-assessed clean energy (PACE) lease to allow customers to finance the solar system and pay for it as a line item on their property tax assessment. Brad Copithorne, VP of commercial PACE at Renew Financial, said, "Traditionally, to do a 20-year PPA in the commercial space, what you needed to qualify was an investment-grade host," and added that that situation only applies to 5 percent of the rooftops. "With PACE, we can finance a very high percentage of those rooftops, so we are massively expanding the market." Renew Financial manages the PACE program; Demeter Power, a U.S. DOE SunShot Incubator awardee, developed a commercial financing structure with less tax risk; and Conergy financed the project. The first solar project using this tax structure is at the Tiburcio Vasquez Health Center (TVHC) in San Leandro, California. Conergy financed and Demeter developed a 200-kilowatt PV system for the health center "that will offset approximately 90 percent of the energy consumed from the grid," according to a release. Andrew de Pass, CEO of Conergy, said that the firm is "expanding PACE lease financing to more commercial solar projects in California this year." Copithorne called the TVHC project the first commercial solar PACE deal and said that it was "not even within the spectrum of something that could be financed by a traditional PPA." "This new financing program costs us nothing upfront, lowers our bills, and minimizes our environmental impact," said David Vliet, CEO of TVHC. Originally published on Greentech Solar