While the Year 5 Small ZREC Tariff Program opened on February 15, 2017 and closed on March 1, 2017, Eversource announced on June 14, 2017 that the program for solar projects of a scale less than or equal to 100 kW was undersubscribed.
At the close of the Year 5 Small ZREC two-week window on March 1, 2017, Eversource received 265 completed Year 5 Small ZREC Applications, leaving the Eversource Year 5 Small ZREC budget of $4M undersubscribed by approximately 40%. Because the utility was undersubscribed, Eversource did not need to conduct a random selection.
Eversource was able to select the following number of applications in each round of selection thus far:
Round 1: 255 applications
Round 2: 45 applications
Round 3: 51 applications
As of June 14th, 218 projects had Fully Executed Service Agreements, and had provided an acceptable form of Performance Assurance. These totals do not include Round 3 fully executed Agreements as they were due back by 5pm on 6/23/17.
Given this undersubscription for Small ZRECs, Eversource will continue to move down the queue until the available budget is committed. Additionally, the utility reached out to contractors and property owners to encourage the submission of additional applications. Eversource will be reviewing Applications on what is estimated to be a monthly basis for eligibility, and sending Agreements after the eligibility process is complete each month.
Greenworks Lending’s CEO and Co-Founder Jessica Bailey encourages “Climate Mayors” to consider C-PACE as a tool for their environmental and economic development agendas as we move “beyond Paris.” C-PACE financing programs provide business owners with the ability to positively affect their bottom line while taking action action on behalf of our environment through the installation of energy efficiency and renewable energy measures.
Talk to Greenworks lending about bringing the C-PACE program your state or your municipality – or get started on a project today by completing the below information.
June 7, 2017 Update: HB 7036 passed in a vote recorded at 2:39AM by a margin of 32 Yea, 0 Nay, and 4 absent/non-voting. For more detail on the bill and or voting, please visit the CT General Assembly website here.
A bill that supports the solar industry via an extension of the ZREC (Zero Emission Renewable Energy Certificate) Program is moving through the CT Legislature right now. HB 7036 has passed the House and is waiting on floor action in the Senate. It must pass by tomorrow at midnight when Session ends.
The extension of the ZREC program has a material impact on businesses throughout CT, particularly solar energy contractors and their clients who are able to sell (via renewable energy credits) excess production from their solar panels to Eversource and UI for qualifying projects at a 15 year contract rate. The credits improve the economics of the business decision to “go solar” and when combined with C-PACE financing help yield positive cash flows.
If you feel comfortable in doing so, it would be helpful if you contacted your Senator and urge passage of HB 7036 in the Senate. Calls and emails have a significant impact at the state level and this would be a big help. Please pass this message on to other friends and contacts elsewhere in the State.
You can find out who your Senator is here. Please call their office right now and tell them that you work in and/or support the energy industry and that your Senator must vote yes on this legislation.
Thanks and remember the clock is ticking on action.
For many years, Third-Party Ownership (TPO) structures dominated the distributed generation solar market for both residential and commercial and industrial systems. With this approach, a solar developer would work with a tax equity partner (e.g., banks) to monetize the federal investment tax credit and accelerated depreciation. The solar firm would then pass some of these benefits onto the consumer through a lower power purchase agreement or lease rate.
Over the past two years and especially in the past twelve months, this TPO model has been declining in use relative to direct ownership.
As both panel and balance-of-system costs continue to plummet, direct ownership has become increasingly beneficial for consumers. The financial reason is clear. Consumers who have the capacity to use the tax credits themselves receive 100% of the value. Under a TPO model, a large share of the value is consumed by the tax equity partner.
Even though costs have declined dramatically enabling far more use of direct ownership, direct cash payment can still be challenging and is not always the best use of financial resources. Commercial PACE is a perfect tool to provide direct ownership benefits while enabling a property owner to spread payments over the useful life of the system. Moreover, a property owner does not need to come out of pocket for the project or guarantee the financing from the corporate or personal level. C-PACE does not affect property equity and can be used for non-investment grade buildings. Finally, the cost of capital is low and the interest is tax deductible.
In general, C-PACE is emerging as a practical tool for direct ownership of solar systems across the United States.
Greenworks Lending is proud to highlight the results of pursuing our mission: to make clean energy a smart business decision. Impact measures are based on the Environmental Protection Agency’s greenhouse gas equivalencies calculator. Number of jobs created is based on project expenditures, as suggested by the Council of Economic Advisers (CEA) for estimating job growth in the American Recovery and Reinvestment Act.
Ross Solar Group and Celco Heating and Air Conditioning teamed up with Greenworks Lending at Bright Horizons Child Care and Early Education Center in Stamford CT to replace end of life HVAC with Mitsubishi air sourced heat pump technologies and instal an ERV (energy recovery ventilator). The updates and building’s general electric needs are now powered by a 100kWh solar array while teachers and students enjoy room-by-room comfort. Property owner Don Gary, Ross Solar’s Walter Erickson, and Celco’s David Elovecky comment during the green ribbon cutting ceremony in May of 2017.
CT businesses could miss out on something wonderful, much in the same way Disney’s now-classic romantic comedy star “Shrek” might have if he had not seen changes in the moonlight. With the State’s next Zero Emission Renewable Energy Credits (ZRECs) request for proposal period opening on April 27, 2017 and the status of future contract periods unknown, energy astute business owners looking to lower operating costs through solar need to explore the ZREC program before the window closes, leaving money on the table.
Here is what businesses owners need to know:
The ZREC program provides renewable energy credits (translates roughly as “businesses get paid”) for producing between 100kW and 1MW of power – otherwise known as the approximate amount of power your average commercial property roof can produce.
The State’s two investor-owned electric utilities, UI and Eversource are compelled by legislation to support approximately $8M in such investments annually.
Businesses installing solar can apply to “sell” ZRECs into these 15 year long contracts while continuing to use the power they generate.
This means businesses are effectively receiving a grant to use the solar power they install on their roof, which is just a portion of the economic incentive to go green.
Piggy-backed with a public/private partnership program called C-PACE or Commercial Property Assessed Clean Energy, business owners can see positive cash flow from their renewable energy projects on day one.
C-PACE financing provides long term payback of clean energy investments through a special tax assessment on the commercial property. Terms are typically 20 years for solar and the financed amount can include hard and soft costs related to the installation, including a new sub-roof in some cases.
“Whoa,” said the ogre to the donkey. “How’s that work?”
Consider the example of a manufacturing company only using non-renewable sources. A solar installation would certainly lower their utility bill, but how do ZREC and C-PACE combine to yield day one cash flow advantages and tremendous lifetime projected savings for a business?
The calculation and process goes something like this:
Identify an energy services contractor to put together a C-PACE financed, ZREC proposal.
Work with contractor to create a proposal that includes solar panels and generates power between 100kWh to 1MW. For illustration purposes…
A 400 kW solar system might yield 500,000kWh annually
Bidding that production into the large ZREC program potentially yields an annual income of $27,500 or $398,371 over the 15 year contracted period
Based on a sample-awarded $55 ZREC
Totaling the saved utility costs, applicable tax credits, favorable (long-term financing) provided by C-PACE, and ZREC payments will result in a day one positive cash flow for the business.
Rhode Island solar developers such as Direct Energy Solar have long helped privately owned businesses save money on their electricity costs with highly reliable clean energy solar systems. With the development of a Commercial PACE program and the subsequent entry of Greenworks Lending as a capital provider, RI is poised for a significant economic development opportunity. The indicator: the first closed C-PACE loan in the state.
“In conjunction with Greenworks Lending, we were able to show Embrace Home Loans a solar energy solution that allowed them to take full advantage of Federal tax incentives as well as the Rhode Island Renewable Energy Grant program,” stated Ron French, Head of Commercial Solar for Direct Energy Solar headquartered in Columbia, Maryland. “They’re a mortgage lender, so when we started talking to them about solar and Commercial Pace, they were quick to understand the environmental and financial benefits and were ready to break ground as the first C-PACE financed project in the state,” he continued.
Rhode Island’s first C-PACE financed investment supports two solar installations at Embrace Home Loans headquarter offices at 25 and 110 Enterprise Center, a Class A office park outside of Newport, Rhode Island. Combined, Direct Energy Solar’s installations span 960 panels and deliver over 400,000 kilowatt hours of power annually. Savings projected over the life of the system (20 years) exceed $1MM.
The project is making news as a “first” in local news media and has drawn recognition from Rhode Island Governor, Gina Raimondo. Click here or on the preview image at right to view an article featuring her commentary on the C-PACE program and clean energy efforts in her state.
Following our announcement of a partnership with Renovate America at the PACENation Summit, Greenworks Lending and Renovate America are putting the partnership into action in Missouri. Working through the state’s PACE program, the Missouri Clean Energy District, we are delighted with the level of excitement regarding commercial PACE financing as a means to develop energy savings projects throughout the state.
What began – and continues – with extensive product training, awareness raising, and registering of contractors and project developers has led to a growing pipeline of projects. Proposed projects being evaluated, underwritten and nearing execution include a variety of building types from multi-family retrofits to retail centers and class A offices. Accordingly, energy improvements include solar, HVAC and several multi-measure projects.
“The C-PACE program represents the cumulative work of the legislature and professionals who are dedicated to both economic development and conservation of resources,” stated John Harris, Director of Finance for the Missouri Clean Energy District. “The fact that the first HERO Commercial projects will soon be funded by private investment dollars is a tremendous opportunity for the state to help our businesses remain competitive while reinvesting in their commercial real estate,” he continued.
Commercial Property Assessed Clean Energy financing, or C-PACE classifies energy-saving upgrades as a public benefit – like a sewer, road extension, etc. and allows 100% of hard and soft costs to be funded by private capital and repaid via a surcharge on the property tax bill. The Missouri Clean Energy District and State legislators approved the program, which Greenworks Lending has helped introduce in several states, as a method to help facilitate energy independence for privately owned businesses.
“Where the sun meets the solar panel – and throughout the entire structure of a commercial property – is the work of an electrical contractor,” notes Genevieve Sherman, Head of New Markets and Partnerships for Greenworks Lending. “This is why we are pleased to become a preferred provider for NECA-ECAP. Their members are developing these projects first-hand and can benefit from being able to bring C-PACE to the table.”
The National Electrical Contractors Association (NECA) is the industry association and voice of the $130 billion electrical construction industry that brings power, light, and communication technology to buildings and communities across the U.S.
NECA named Greenworks as their preferred source of C-PACE financing for NECA member contractors, and will feature Greenworks’ financial product on its Energy Conservation and Performance Platform (www.NECAECAP.com).
As part of the program, Greenworks Lending will provide member contractors with:
Financial product knowledge and training for their full team
Ride along sales support when necessary
Marketing materials including case studies – co-branded upon request
Calculator tools to quickly evaluate C-PACE project feasibility
“With Greenworks as our dedicated C-PACE financing provider, NECA Members no longer need to worry about access to C-PACE financing and high-level support,” stated Mir Mustafa, Executive Director of Business Development at NECA.