Two things distinguish the just-announced $64.4 million funding from U.S. Bancorp (USB) and National Consumer Cooperative Bank (NCCB) for Borrego Solar's commercial-scale installations.
“It is one of the biggest funds ever closed in Massachusetts,” said Borrego CFO Bill Bush, “and, because Massachusetts is a Solar Renewable Energy Credit [SREC] state, it is a vote of confidence for this relatively new SREC market.” The fund will support the construction of eighteen megawatts of solar across eight sites.
NCCB will provide debt funding. U.S. Bancorp and Borrego Solar, as equity partners, will own the projects and share the 30 percent investment tax credit (ITC) and accelerated depreciation. Municipalities, a school district, and other participants will get reduced electricity prices.
In Massachusetts’ SREC market, unlike in a production-based per-kilowatt-hour rebate incentive system, Bush said, solar systems’ kilowatt-hours earn SRECs which are auctioned to utilities and others in need of satisfying renewables, solar and emissions mandates.
NCCB’s participation, Bush said, “relies primarily on the sale of these certificates and demonstrates,” he explained, that “a bank took a look at the market and said they believe in it and they believe the projects will be able to generate adequate cash flow to pay back what they underwrote.”
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