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High Net-Worth Individuals Getting in on the Solar PPA Game

Investment in solar projects in the United States has largely been the purview of large financial institutions with the tax appetite to utilize the investment tax credit, thus favoring larger solar projects. Now, with innovative financing structures, high net-worth individuals can get in on the game and unrated credit customers with smaller solar projects can save money on future energy costs. A win-win. This week, Conergy a leading global solar photovoltaic downstream company, along with its owner, Kawa Capital Management, Inc. (Kawa) has closed one of the first leveraged tax equity partnership structures with individual investors who could utilize the investment tax credits.

The first project to utilize this innovative financing structure happens to also be Palo Alto’s second largest solar roof system. The system, installed at the Oshman Family JCC (OFJCC) in a partnership with THiNKnrg is a 397.5 kW system. Encompassing 1,840 solar panels spread across the rooftops of 12 buildings, the project is expected to save $26,000 in the first year and an estimated $1.5 million in energy savings over the 20 year PPA. The solar energy system will supply approximately 20 percent of the OFJCC’s energy needs. In addition to its financial savings, the OFJCC will reduce its carbon footprint by more than 3,000 tons of CO2 during the 20-year lease, which is the equivalent to planting 68 acres trees.

According to Anthony Fotopoulos, CEO, Conergy Americas, “Combining individual investor appetite for investment tax credits alongside debt from specialized financial institutions like Kawa in this new structure allows Conergy to uniquely finance projects that previously were too small for typical tax equity investors, or didn’t fit usual tax equity requirements. Solar projects that were previously considered un-financeable, can now be financed.” Fotopoulos further noted, “There’s no reason any building or land should be prevented from having solar on it should they want it.”