New Structure Makes Solar Accessible to Almost All Commercial Property Owners
SAN FRANCISCO & MIAMI--Today, Conergy, a leading global solar company, and Demeter Power, supported by the U.S. Department of Energy SunShot Initiative, announce the launch of a new commercial solar financing structure -- PACE Lease (Property Assessed Clean Energy) financing -- and the first customer to benefit from it. This innovative financing structure opens up solar access to the 90% of commercial property owners in America who have had challenges getting solar financing by collecting third-party-owned solar revenues as a property tax assessment.
In America, solar on commercial properties has failed to take hold because the overwhelming majority of commercial property owners have not had access to solar financing. Financiers have not been comfortable taking on credit risk of funding small commercial systems under a long-term lease or PPA agreement. PACE Lease financing launched by Demeter and backed by Conergy combines conventional solar financing with Property Assessed Clean Energy (PACE) financing to solve this problem.
PACE Lease financing maintains the convenient structure of a Power Purchase Agreement, in which commercial property owners receive their solar system installation financed by Conergy with no capital investment. Under this structure, property owners pay for solar electricity produced on their roof at a cheaper monthly rate than they were paying for electricity from the grid, significantly lowering or eliminating their electricity bill.
PACE Lease financing leverages PACE, specifically the CaliforniaFIRST PACE Program, which is administered by Renew Financial. A commercial property owner benefits by paying less in added property taxes than they were paying for electricity from the grid prior to getting solar. Property owners also avoid the hassle of an additional solar bill and can automatically transfer their energy-producing property and property tax payments to a new owner if they sell the building.
The first beneficiary of this innovative structure is the Tiburcio Vasquez Health Center (TVHC) with its newest clinic location in the Ashland section of San Leandro, California. Conergy funded and Demeter developed a 200 kW solar system for TVHC that will offset approximately 90% of the energy consumed from the grid. TVHC will pay for solar energy from this system through a voluntary assessment on their property taxes. Conergy and Demeter arranged the deal for Conergy to cover construction and legal financing costs, with initial support for Demeter's concept funded by the Department of Energy SunShot award.
"We are thrilled to work with Renew Financial and the state of California to spearhead the way for 90% of commercial property owners to get solar with PACE Lease financing," said Andrew de Pass, CEO of Conergy. "We expect this deal to be the first of many."
"We believe this project will be the catalyst for commercial solar to take off in California," said Brad Copithorne, Vice President of Commercial PACE for Renew Financial. "Business owners have been looking for this type of financing that is offered at competitive rates and that allows for easy repayment on their property taxes. We are looking forward to funding similar deals with partners like Conergy and Demeter through the CaliforniaFIRST program."
"This new financing program costs us nothing up front, lowers our bills, and minimizes our environmental impact," said David B. Vliet, CEO of TVHC. "We are very pleased to be the first beneficiary of this new financing structure proving that solar is within reach for organizations like ours that must balance fiscal responsibility with a mission of improving the health and wellness of the communities we serve."