Game-changing Solar Finance Model for Mid-size Projects

by Guest Contributor Camilo Patrignani, CEO of Greenwood Energy

Mid-size solar farms hit the ‘sweet spot’ with investor groups willing to invest in renewable energy. 2.9MW ground-mounted Soltage-Greenwood Walpole, MA solar array image via Greenwood Energy
Mid-size solar farms hit the ‘sweet spot’ with investor groups willing to invest in renewable energy. 2.9MW ground-mounted Soltage-Greenwood Walpole, MA solar array. Image via Greenwood Energy

These days, a $40 million dollar equity financing deal might not seem groundbreaking in America’s power markets. But for the keen analyst of distributed solar energy, that same investment may just herald a shift toward the future of project financing.

Count our team at Soltage-Greenwood among the latter, with an outlook brightened by the recent announcement John Hancock Life Insurance would lead a $40 million initial round of equity funding destined to finance multiple project pools across America, starting with 13 megawatts (MW) at six locations across four northeastern state.

Just another solar investment, right? Not really. While the boom in distributed solar energy generation is one of the hottest topics in today’s energy economy, most large institutional investors haven’t traditionally been interested in medium-sized solar installations, and as such, are just now getting into the game.

This trend is especially important considering clean energy investment fell for the second year in a row in 2013, down 11 percent after a similar 10 percent decline in 2012, according to Bloomberg New Energy Finance. While investor appetites in solar are growing, good investment opportunities can often be hard to find, meaning dollars are scarcer and thus more important for solar developers.

Big investors typically want to invest in big projects and standardized contracts, creating difficulty financing distributed solar. That problem hasn’t played out in the rooftop residential market, where developers like SolarCity have installed record amounts of solar panels because all contracts are standard and investors only need to review a diversified pool of credit scores. The same pattern is true for the large utility-scale market where companies like SunEdison have been able to construct massive solar farms and investors only need to review one set of contracts.

But that problem has vexed mid-sized developers who can often fund project-planning phases on their own but rely on securing long-term investors after projects are fully permitted and construction can begin. Individual arrays aren’t large enough to attract large investors, but project pools can involve many different contracts. Without investment to cover the long period of exposure between when the first rack goes in to when the system switches on, potential projects pile up but result in far too few interconnections to fulfill America’s solar energy promise.

Our approach to this problem may seem simple, but it’s been a success: Package together multiple solar projects in states with favorable renewable polices to create the scale and standardization required for big investors to take notice.

Think back to that 13MW project pool I mentioned earlier – it was sizable enough to attract a major institutional investor and secure sufficient equity financing that not only funds our initial project pool, but empowers Soltage-Greenwood to look ahead to an aggressive series of additional (and larger) project pools in 2014.

Now combine that equity financing with our business model of partnering with leading solar developers through the Soltage-Greenwood joint venture, and solar engineering, procurement, and construction contractors through the Greenwood Biosar joint venture to handle every aspect of projects from engineering to procurement and construction through maintenance, and the reason for our optimism comes into focus.

By vertically integrating the solar development business, mid-sized developers like Soltage-Greenwood can reach the scale needed to attract institutional investors, ensuring project financing through construction and interconnection, allowing power-purchase agreements to be put in place, and providing a positive return on investment that encourages additional investment.

Add it all up, and we believe we are well positioned to quickly and efficiently capitalize on the growing demand for distributed clean energy well into the future.

Greenwood Energy is the North American clean energy division of the Libra Group, a privately owned international business group comprising 30 subsidiaries operating across five continents.

Greenwood creates clean energy options by building and investing in new solar energy projects, manufacturing sustainable fuel to replace coal, and developing combined heat and power fuel cell systems.

This article, Just Another Solar Deal, Or The Future Of Mid-Size Project Financing?, is syndicated from Clean Technica and is posted here with permission.

US Air Force completes biggest military Solar power installation

by Tina Casey.

It looks like the Air Force wins the week in terms of military renewable energy projects. The biggest military solar power plant in the US has just been completed at Davis-Monthan Air Force Base in Arizona, a 16.4 megawatt installation that is expected to save about $500,000 in electricity costs yearly and provide about 35 percent of the base’s electricity needs.

Renewable Energy at Davis Monthan Air Force base
Renewable Energy. Solar PV powers Davis Monthan Air Force base.

If you’re keeping score at home, the new military solar power plant nudges the Air Force ahead of the Army, at least for now. Earlier this week, the Army Corps of Engineers and Energy Initiatives Task Force announced 15 contracts for military solar power, which is pretty impressive, but that was a preliminary step involving the formation of a pool of eligible bidders for future projects.

Chevron…There They Go Again

Now here’s something interesting. One of those 15 winning Army contracts went to Chevron Energy Solutions, which is also part of the public-private partnership that went into building the new solar power plant at Davis-Monthan AFB.

Chevron Energy Solutions is under the Chevron umbrella. Chevron recently made news for giving away free pizza coupons after a massive gas line explosion in Pennsylvania, but Chevron Energy Solutions has been running hard on the solar track with a focus on government and school facilities.

Another partner in the project is Macquarie Infrastructure Company, which also has fossil fuel interests along with a range of other infrastructure operations. Like Chevron it has diversified into renewable energy, through MIC Solar Energy Holdings.

A more familiar name in the solar business, SunEdison, constructed and will manage the new solar power plant under contract with MIC Solar.

For the record, the installation itself consists of 57,000 SunEdison MEMC Silvantis™ solar modules. They are mounted on single-axis trackers that pivot to take best advantage of the sun’s position throughout the day.

Davis-Monthan AFB solar array. Image courtesy of Tucson Sentinel
Renewable Energy at Davis-Monthan Air Force base. This solar array of 16.4MW will power up to 16,400 homes. Image courtesy: Tucson Sentinel

Also for the record, the project was financed by North American Development Bank, which was set up by the US and Mexico to develop infrastructure projects that benefit the environment along the border.

The new project enables Davis-Monthan to avoid about 17,000 metric tons of carbon dioxide, 11 metric tons of nitrogen oxides, and 17 metric tons of sulfur dioxide annually.

It was built under a power purchase agreement with no up-front cost to the Air Force, so no taxpayers were harmed in the making of this renewable energy project.

Air Force Solar Power

Now let’s take a look at how the new solar installation plays into the Davis-Monthan mission, which is this:

Deploy, employ, support, and sustain attack airpower in support of Combatant Commanders anywhere in the world at a moment’s notice. Train the finest attack pilots for the Combat Air Forces. Provide every member of Team D-M with responsive, tailored, mission-focused base support.


At first glance there’s not much of an overlap there, but now take a look at the Davis-Monthan vision:

A premier Fighter Wing comprised of resilient Warrior Airmen, armed with precise tools and training; powered by a culture of leadership and innovation; prepared to provide responsive combat airpower which exceeds Combatant Command expectations for excellence.

And here is a snippet from the base’s “Green in the Desert” program demonstrating how the culture of leadership and innovation dovetails with clean energy:

…the DM Energy Team has begun redeveloping the base’s strategy with high-tech solutions to meet Air Force wide mandates in four areas: new technology, strategic partnerships, energy awareness, and focus on the basics. With innovation and energy consciousness in every Airman’s life, we can meet the Air Force goal to “Think green, build green, and fly blue.”

It’s also worth noting that Davis-Monthan is one of those military facilities transitioning out of coal power and into renewable energy (Fort Drum in New York is another recent example).

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This article, US Air Force Scores Biggest Ever Military Solar Power Plant, is syndicated from Clean Technica and is posted here with permission.

About the Author

Renewable Energy. Tina CaseyTina Casey specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. You can also follow her on Twitter @TinaMCasey and Google+.

Goldman Sachs calls Renewables ‘compelling’ commits $40 Billion

Originally published on RenewEconomy by Giles Parkinson

Investment banking giant Goldman Sachs has declared the renewable energy sector to be one of the most compelling and attractive markets – and is backing up its talk with $US40 billion ($A46 billion) of made and planned investments.

Goldman Sachs is not the first big bank to talk up the renewable energy sector, or even “sustainable” investments. But it is one of the first to put real money behind it.

In 2012, the bank made a commitment to invest $US40 billion in renewable energy, and it has made a number of large equity investments, over and above the normal advisory and fund-raising work that is the usual bread and butter revenue for investment banks such as Goldman Sachs.

Goldman Sachs finds this market incredibly compelling, said Stuart Bernstein, who heads the bank’s clean-technology and renewables investment banking group, told Recharge in a recent interview in a story titled Goldman goes Green.

It is at a transformational moment in time.

Bernstein said the bank is taking a decades-long view and is convinced that renewable energy will be an important component of global GDP growth.

He dismissed suggestions that it was part of a PR campaign – such as BP’s infamous “Beyond Petroleum” pitch of a decade ago where it appeared to spend more in marketing than it did in new technologies.

It will be important from a societal perspective, and it will be good business for us and our clients, Bernstein told Recharge.

We want to be extraordinarily focused, involved and have the best franchise in the area. That’s how we think about it.

Among Goldman Sachs’ key investments are a recently-approved $1.5 billion investment for a near 20 per cent stake in Danish offshore wind energy developer Dong Energy.

Renewable Energy in action. Ivanpah solar power tower (CSP) now online.
Renewable Energy in action. Ivanpah solar power tower (CSP) now online.

It has also a substantial investment in BrightSource Energy, which is about to bring its huge Ivanpah solar power project (pictured) into full production – it will be the largest in the world.

Goldman Sachs also provided $500 million of finance to SolarCity, to allow the biggest solar installer in the US to expand its solar leasing business. Goldmans is one of a number of banks to do that –the latest was Bank of America/Merrill Lynch.

It has also been an early investor in First Solar, the largest solar PV manufacturer in the US, SunEdison, and made big money from the sale of Horizon Wind Energy to Portugal’s EDP for $2.15 billion in 2007.

Goldman’s commitment of $40 billion is based around a number of assumptions – that costs will continue to decline as efficiency improves, that solar and wind will reach grid parity without subsidies in the not-too-distant future, and that energy storage issues will also be solved.

It also believes that the position of coal at the top of the global fuel mix is eroding – something that it highlighted in a recent report that said the window for thermal coal was closing rapidly.

According to the Recharge article, much of Goldman Sachs’ investments will be focused on the emerging economies of Brazil, China, India and Mexico —along with developed economies such as Japan and South Korea that have also made a large commitment to renewables, and are reliant on expensive fossil fuel imports.

In Japan, Goldman Sachs has established a new independent power producer called Japan Renewable Energy (JRE) — to develop, build and operate solar, wind and other renewables projects. It is backed by the bank’s $3.1 billion GS Infrastructure Partners II fund (GSIP). It has already committed to a 250MW solar project in Okayama and a 40MW PV plant near Tokyo.

Goldman has paid more than $3400 million for a majority stake in an Indian wind energy business called Renew Wind Power, which plans to build 1GW of facilities within two years, and it is looking to build solar energy plants to supply mining operations in Chile, where even companies such as BHP Billiton are looking at alternatives.

Bernstein also heads Goldman’s venture-capital group, which has a key office in California’s Silicon Valley and which is focusing on late-stage venture companies. Recharge says it is also using its convening power to host conferences and forums for sector stakeholders.

Other investments include the FloDesign Wind Turbine, a start-up that was developing  an  experimental high-efficiency shrouded wind turbine, and South Korean wind turbine manufacturer CS Wind, which plans an IPO this year.

This article, Goldman Sachs Declares The Renewable Sector One Of The Most Compelling, is syndicated from Clean Technica and is posted here with permission.

About the Author

Renewable Energy with Giles ParkinsonGiles Parkinson is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia’s energy grid with great interest.

NYC’s Largest Solar Power Plant To Cover World’s Largest Landfill

Originally published on Climate Progress by Guest Contributor Kiley Kroh

On Monday, New York City Mayor Michael Bloomberg announced that Freshkills Park on Staten Island, once the world’s largest landfill, will soon be converted into the city’s largest solar energy facility.

Once completed, the plant will produce up to 10 megawatts of power — five times more than any solar energy system in the city and enough to power approximately 2,000 homes.

Freshkills Park on Staten Island, once the world’s largest landfill, will soon be converted into the city’s largest solar farm.
Freshkills Park on Staten Island, once the world’s largest landfill, to be converted into the city’s largest solar farm.

“We’ll be turning something which was a disaster into a benefit for the people of Staten Island, and for the environment,” said James Molinaro, Staten Island Borough President and major supporter of the project.

The installation will span 47 acres and will consist of up to 35,000 high-efficiency solar panels, installed and operated by Sun Edison at no cost to the city.

And New York isn’t stopping with renewable energy on the city’s former dump.

According to the city, “the administration is moving forward with steps to officially map an additional 1,500 acres of Freshkills into parkland, officially bringing the total for Freshkills Park to 2,200 acres and bringing total parkland in New York City to more than 30,000 acres for the first time in history.”

The parkland will be mapped for a variety of uses and will have a provision for specific renewable energy sites, which will expedite and streamline the construction of the solar plant and potentially other renewable energy projects.

“I’m certain that eventually we’ll have some windmills up there,” Molinaro said.

Fostering the market for renewable energy and reducing greenhouse gas emissions are two key components of Bloomberg’s PlaNYC, released in 2007 and focused on making America’s largest city more resilient to the damaging effects of climate change.

Outside of the city, Gov. Andrew Cuomo has been a major proponent of solar energy, launching his successful NY-Sun initiative in 2012. Lawmakers are currently seeking a 10-year extension of NY-Sun, and while the legislative session expired before two versions of the bill could be reconciled this year, supporters are confident Cuomo will be able to sign the extension in the coming year.

This article, NYC’s Largest Solar Power Plant Planned To Cover World’s Largest Landfill, is syndicated from Clean Technica and is posted here with permission.