James Dumas - Solar projects are "99% financing and 1% engineering"
April 21, 2011 - Green Buildings
The zoo was looking to expand its growing green profile and found a double use (read as an additional revenue stream) for its parking lot in the canopy solar design - much like property owners in New England are looking to leverage their unused roof or land assets into positive cash flow. The technology was the easy part, structuring the financing was a bit trickier, largely because they could not benefit from some of the incentive programs which available here in New England.
If you've been following this Green Buildings section, then you are probably aware Massachusetts created an industry leading incentive program which allows system owners to receive Solar Renewable Energy Certificates (SRECs) for generating clean energy via solar power. Those SRECs can then be sold to the electric suppliers in the state in order for them to meet state mandated goals. The program is attracting national attention and financing the project at the Cincinnati Zoo would have been easier with a program such as the one here in Massachusetts!
So how did they eventually fund the project? As you might suspect, it was a combination of financial instruments - federal New Market Tax Credits (more on NMTC's in future articles), federal energy tax credits (30% Investment Tax Credit/1603 Treasury Grant), sale of electricity, and selling Renewable Energy Certificates (RECs) - a young sibling of SRECs at a fraction of their value. New Market Tax Credits were ultimately the knight in shining armor making the deal work.
In MA we have SRECs and in some locations NMTC's - you do the math.
James Dumas is a principal with Solect Energy Development, LLC, Hopkinton, Mass.