Bond Financing For Solar Energy Developments

In this last week Lean and Green noted a report where a bond financing deal is paving the way for a community solar energy farm.

In Brick, NJ the township council were seeking ways to safely develop a capped landfill.  The township will borrow the cost to build the solar field at a special low interest rate only available to municipalities. Standard Alternative, LLC, the company selected to redevelop the site, will then reimburse the township as money is disbursed.

The township will benefit from an upfront $2.5 million payment from Standard Alternative as well as annual rent of the property between $50,000 and $85,000, depending on how much energy the site produces. After 15 years, the township will own the property outright, and will be able to generate electricity for property owned by the township and BTMUA, as well as sell solar energy credits to the power company for a profit,

In exchange, Standard Alternative will make money from the deal over the next 15 years by selling its own energy credits generated by the site.

During the 15 year period, the township and BTMUA will also be able to purchase energy for about 40 percent less than the rate at which they are currently paying, saving a minimum of about $300,000 per year.

Could this form of financing offer additional impetus to the installation of community solar farms?

ACCELERATING GROWTH IN SOLAR ENERGY

I recently met with an executive from the solar energy industry, the company portfolio supports solar developments in one US state.  In our conversation I was provided with insights on how new solar installations get started.  My feeling was whilst the company was doing a great job installing solar systems large scale projects required special investment.

I began to investigate how large scale solar projects can be funded by Solar Investment Bonds that offer a great return of 10% annual interest .  A scheme like this has been created in Europe with a 50 MW solar power site in Spain .

Here in the US Solar Millennium AG and solarhybrid have issued a bond for a US solar power site the plan is to develop a 2.25 gigawatt project.  Solarhybrid expects to begin construction on the first US project as early as 2013, this will be with the 1,000 MW Blythe solar plant in California.