That the U.S. military is taking a major role in renewables deployment isn’t news that much anymore. Still, a recent announcement shows how big that commitment is.
Project SolarStrong is a multi-year project worth more than $1 billion under which developer SolarCity will install, own, and operate rooftop solar systems on up to 160,000 privatized military residences on as many as 124 military bases across 33 states. The project would double the current number of residential rooftop solar systems in the U.S.
There’s another component of the project that’s worth noting – a large infusion of private capital in a renewable energy project that enjoys government aid through a federal loan guarantee. But the financing is entirely from private sources.
That’s the kind of news that gets lost in the current climate of budget austerity and allegations of waste when a project goes bad.
In September 10, 2011, the Obama administration authorized the US Renewables Group (USRG) to provide the first installlment of $344 million in financing for Project SolarStrong. Ed Feo, managing partner of US Renewable Finance said.
"This will be the first time that long term debt has been successfully deployed to finance a residential distributed generation project at such a large scale, resulting in a lowered cost of capital for the project that will enable an unprecedented expansion of U.S. residential solar power."
The U.S. Department of Energy’s Loan Guarantee Office has offered a conditional commitment for a partial loan guarantee to USRG Renewable Finance for the project, which covers up to 80 percent of a loan provided to a qualifying renewable energy project. USRG Renewable Finance will provide the financing in partnership with Bank of America Merrill Lynch.
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The project will be financed entirely by private capital. It calls for installing a total of 371 megawatts of solar PV systems on military housing. SolarCity, which currently employs more than 1,200 people in 11 states, will create new jobs and help jumpstart the renewable energy industry in up to 22 additional states, some of which have very little solar generation capacity today.
SolarCity said it will seek out veterans to hire and train or family members of active duty military service members to install and maintain the solar systems.
The SolarStrong Project will have the added benefit of helping the Department of Defense (DOD), the single-largest energy consumer in the U.S., secure its energy needs from domestic renewable sources that are independent from the utility grid, at no additional cost to taxpayers. DOD has a stated goal that 25 percent of all energy consumed by 2025 shall be supplied from renewable sources.
The project will be rolled out over five years, starting with a four megawatt installation at Hickam Air Force base in Hawaii, with construction currently underway. SolarStrong is expected to sell electricity produced from the projects through long-term electricity sales agreements or lease solar systems through long-term lease contracts.
The SolarStrong projects will likely include installing solar on other privatized buildings on military bases, such as community centers, administrative offices, maintenance buildings and storage warehouses.
Some interesting news at a time when public-private energy partnerships have gotten a bad name.
COMMENTARY: SolarCity has had a big year, first with news that Google is creating a $280 million fund to finance its residential solar projects, and now with the announcement that it will double the amount of residential solar photovoltaic installations in the U.S.
In September 7, 2011 press release, SolarCity unveiled plans to double the total number of residential solar installations in the U.S. through installation of solar power on 160,000 military homes. Lyndon Rive, SolarCity’s CEO said.
“We’re extremely grateful to the Department of Energy’s Loan Programs Office, in addition to our partners, U.S. Renewables Group and BofA Merrill Lynch. Without this group, we would not have been able to make the economics of this project work. Now the solar industry has a debt model that can make distributed generation affordable on a massive scale.”
Aaron Gillmore, SolarCity’s vice president of solar development said.
“Thanks to the Energy Department’s leadership and resolve, we can now bring an unprecedented opportunity to privatized military housing across the U.S. We believe the SolarStrong model will deliver the most affordable solar option available to military housing, and provide a template for financing large-scale residential solar projects well into the future.”
According to SolarCity CEO Lyndon Rive, the $344 million loan from the DOE to finance the first installment of Project SolarStrong has a "very low risk profile," since the DOE guarantee only kicks in after solar systems have been installed and produce electricity. The deal is part of a DOE loan program that guarantees up to 80% of a loan from a private lender--in this case USRG Renewable Finance and Bank of America Merrill Lynch--for a renewable energy project.
SolarCity has already begun work on a SolarStrong project at Hickam Communities at Joint Base Pearl Harbor-Hickam in Hawaii, where its installations will provide solar power to over 2,000 military homes. Rive explains.
"It works similarly to any traditional homeowner. A system gets installed on the roof and produces electricity. If a person isn't there, it will backfeed the meter and build credits with the utility."
SolarCity expects to roll out the rest of the installations over the next five years. And this will, presumably, bring the Department of Defense closer to its goal of moving to over 25% renewable energy generation by 2025. Rive says.
"The military wants to adopt clean power, but they don't want to pay more for it. We needed to come up with a product or value offering that allowed them to save money and at the same time use clean energy."
It's unfortunate that the Solyndra bankruptcy which stuck American taxpayers with a $535 million bill, has put a tarnish on all federally-guaranteed loan programs. This has now become a political hot potato. Politicians may fight all they want, but the facts remain: solar power is just plain good for the environment, reduces our dependancy on fossil fuels and creates a lot of jobs which we drastically need. Troops returning from Iraq and Afghanistan stand to gain, as they will get first priority when it comes to the new SolarCity jobs created by Project SolarStrong.
About SolarCity
Founded in 2006, SolarCity is the nation's leading full-service solar provider for homeowners, businesses and government organizations—the first company to provide solar power system design, financing, installation and monitoring services from a single source. It now serves more than 15,000 customers in Arizona, California, Colorado, Delaware, Hawaii, Maryland, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Texas and Washington D.C.
SolarCity's customers include thousands of homeowners, more than 75 schools and universities, government agencies such as the U.S. General Services Administration (GSA) and Department of Homeland Security, national landmarks such as San Francisco's Grace Cathedral, and well-known corporate clients, including Intel, British Motors, and eBay.
SolarCity pioneered the groundbreaking SolarLease and solar Power Purchase Agreements (PPAs) which can make it possible for homeowners and businesses to switch to clean, solar power for less money than they currently pay for electricity.
SolarCity is privately-owned and it does not publish its financials.
Courtesy of an article dated October 27, 2011 appearing in EnergyBiz and an article dated September 8, 2011 appearing in Fast Company
This should be done more often and in more places. Solar panels are great energy-savers. When all roofs are installed with these panels, we may all have more than enough energy to power an entire city.
Posted by: Eugene Head | 12/29/2011 at 05:19 AM
Hello, This benefit going to rise in the near future because more and more people are initiating in using solar panels at home.. I just heard in news that now most of the American citizens are using solar panels like in Colorado, New Jersey, Texas, etc. This show us that how much we can get from the solar energy by converting all my means into useful stuffs.
Posted by: Solar Panels Texas | 11/13/2011 at 08:21 PM