MMA Renewable Ventures closed nearly $200 million in its third fund, the solar financer and developer said Tuesday.
The company, which finances and develops solar installations, raised the money last year and already spent the cash to create 20.6 megawatts of new solar-power projects throughout the United States. Those projects included a 2-megawatt system at the Denver International Airport, as well as installations for Macy’s Inc., Gap Inc., Florida Power & Light Co. and Lowe’s.
It actually closed its fourth fund in 2007, before its third fund, and used it primarily to finance a 14-megawatt project – then the largest photovoltaic installation in North America – at the Nellis Air Force Base in Nevada at the end of that year.
“Renewable energy, in particular solar, has proven it can weather the financial storm, and will continue to fuel the economy with jobs and economic growth, despite the difficult challenges currently facing the credit market,” CEO Matt Cheney said in a press release. “We’ve confirmed that electricity customers in the U.S. are looking at the long term, and have identified clean, predictably priced energy from the sun as an operational fit that makes sense.”
MMA Renewable Ventures develops solar projects, paying their upfront costs in exchange for long-term contracts with customers to buy the resulting electricity. It finances the projects by sells pieces of them to large companies that can take advantage of the tax benefits of owning solar power.
So far, it has financed and developed 40 megawatts of solar projects. The company financed the 2008 projects, in part, with a tax-equity investment from Wells Fargo and with debt and rebate financing from National Consumer Cooperative Bank.
The announcement is a sign of optimism, particularly as MMA Renewable Ventures says it raised “a portion” of the third fund after the downturn. The news comes at a time when industry insiders are concerned about a “tax-equity hole” that could be a barrier to solar installations, in spite of expected lower prices.
In the economic downturn, fewer companies are assured of making enough money to be able to recoup renewable-energy credits in their taxes, and industry insiders are concerned about a lack of enough tax-equity financing, compared with the number of potential customers that would like to avoid paying upfront costs by taking advantage of such financing.
The clean-energy industry is pushing for a provision, in the economic stimulus bill, that would allow projects to opt for grants instead of tax credits, if they don’t have the tax appetite to be able to benefit from the credits.
But as it’s likely MMA Renewable Venture raised most of the $200 million before the downturn, the real test will be, not its last fund, but its next.
Photo Credit: CC-licensed by Flickr user zizzybaloobah
