Some heartening news broke yesterday, at least if you’re a fan or supporter of clean energy and solar power. SolarCity and BoA-Merrill Lynch announced that they have agreed to terms on financing SolarStrong, a billion-plus dollar SolarCity project – the largest in US history – that could double the number of residential solar installations in the US by installing solar power systems on privatized US military housing communities across the country.
SolarCity is partnering with the leading privatized military housing developers in the US to install, own and operate rooftop solar power installations and provide electricity at a lower cost than utilities. The five-year project plan call for as many as 120,000 installations on military housing units expected to produce up to 300 megawatts of clean, renewable electricity. That would easily make SolarCity the largest provider of solar photovoltaic (PV) power in US history, according to a media release.
Thousands of full-time and temporary jobs will be created as a result of SolarStrong being revived, and SolarCity intends to offer as many as possible to military veterans and family members. SolarCity has hired 1,200 new, full-time employees since the onset of the global recession in December, 2007 – more than one new job per workday, the company points out.
The news is particularly encouraging given growing worries that the global financial system is on the verge of another collapse due to ongoing sovereign debt problems in the Eurozone. BoA-Merrill Lynch stepping in to provide financing validates the assertion, and provides further real-world evidence, that large, private sector financial institutions are looking to add to their clean energy and tech investments, and that government backing can indeed leverage private sector capital resources.
“This project demonstrates the long term viability of large-scale, distributed solar generation,” said Jonathan Plowe, head of New Energy and Infrastructure Solutions at BofA Merrill. “We are excited to see the project through with SolarCity and extend our expertise and financing capabilities to propel residential solar to the next level.”
Originally set to move forward with financial backing from the Dept. of Defense (DoD) and Dept. of Energy (DOE), SolarStrong looked like it was headed for the waste bin amidst all the hullabaloo over the Solyndra bankruptcy.
With the media buzzing about the Solyndra “scandal,” House Republicans launched a campaign to cut and claw back federal funding and financial assistance for clean energy. Caught up in the furor, an anticipated partial DOE Section 1705 loan guarantee fell by the wayside as the DOE notified SolarCity that it would not be able to process the application in time to meet a stipulated program deadline.
With BoA-Merrill Lynch stepping up and providing financing, it appears this chapter of the SolarStrong project can now be brought to a heartening close.
“BofA Merrill never wavered when the loan guarantee wasn’t finalized and worked with us to create a financing structure that works without it,” commented Lyndon Rive, SolarCity’s chief executive officer.
“SolarStrong makes affordable clean energy available on a much greater scale. This is uncharted territory for residential solar. The fact that SolarStrong can move forward without a federal loan guarantee is a clear indication that long-term incentives such as the investment tax credit are working.”
Now revived, the project will be a big boost to flagging economic and job prospects, as well as to an embattled US solar industry divided by the anti-dumping case being brought before the US Commerce Dept. and International Trade Commission by CASM (Coalition for American Solar Manufacturing), an association of US-based solar industry participants, against China and Chinese solar PV manufacturers.
“This is a groundbreaking transaction that represents a key milestone for the U.S. solar industry,” said Tim Newell, managing director for USRG Renewable Finance, an arm of US Renewables Group, a private equity firm that’s been advising SolarCity on the project since its early planning days. “We’re proud to be part of this project that will invest in military communities across the United States.”
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