Solar Project Finance Opens Up to Institutional Investors (Energy Priorities)

A new venture fund partners with institutional investors, project developers, and customers to build distributed clean energy generation plants and to sell the electricity and renewable energy credits to the host site under a power purchase agreement.

Denis Du Bois
November 15, 2006

A MuniMae subsidiary announced today that it has syndicated the first institutional investment in solar energy project finance in the U.S.

MMA Renewable Ventures says it works with energy consumers, project developers and institutional investors to finance solar and other clean energy projects. The finance placement provides institutional investors with tax-credit equity investment opportunities.

It uses a business model somewhat similar to that of SunEdison or Mosier Creek Homes. MMA Renewable Ventures will finance the installation of solar power on a host's site, then sell the power to the host under a power purchase agreement. The host gets the renewable energy credits, while investors benefit from the solar-related tax credits.

The fund's first investment capitalizes a 901kW solar energy facility completed this month at Fetzer Vineyards, a long-time user of solar power.

(MMA Renewable Ventures is a wholly-owned subsidiary of MuniMae, NYSE: MMA)

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Comments

Solar is financially feasible only with subsidies that are meant to equate the cost of solar electricity to traditional electricity. Therefore, the investor (MMA Renewable Ventures) must be very efficient in their development to create a profit where the government intends there to be none (they only want to make the costs equal).

What is the minimum system size to reach a profitable efficiency, and who else is doing this?

Posted by: Ben | November 28, 2006 05:34 PM

We are Financial Consultant. Our client needs Project Finance for 1000MW Solar Power Project.

Posted by: Patel L V | December 10, 2006 01:52 AM