$5.6 Million Deal Encompasses Five Solar System Installations Across Ohio
Columbus, Ohio—Solar energy provider, SolarVision, LLC, is making it possible for schools, municipalities and businesses to take advantage of the economic and environmental benefits of solar power. The company, which organized in 2009 and is led by long-time renewable energy leader, Gregory Kuss and finance executive Don Saul, laid the foundation early on to succeed at bringing affordable solar projects to the state of Ohio.
With a 300 solar panel/65 kilowatt array project already completed at Evening Street Elementary School in Worthington, OH earlier this year and the remaining four solar installations scheduled for completion within October of this year, SolarVision worked with finance partners, Stonehenge Structured Finance, Finance Fund and First Merit Bank to complete the multi-faceted $5.6 million deal.
SolarVision and Newcomerstown (OH) Exempted Village Schools are officially commissioning a 350 solar panel/68 kilowatt array of solar energy for Newcomerstown West Elementary and another 500 solar panel/128 kilowatt solar array for Newcomerstown High School on Tuesday, October 5, 2010. The remaining projects scheduled for completion in October of this year include a 936 solar panel/220 kilowatt solar roofed carport system in the parking lot of the Athens (OH) Community Center and a 1,092 solar panel/249 kilowatt solar array for a water treatment plant in Washington Court House, OH.
SolarVision’s muscle is a Power Purchase Agreement it created upon its formation to use available energy tax credits to provide solar energy solutions that were affordable and could provide costs savings to hosts—entities that sign the Power Purchase Agreement and house the actual solar arrays. The Power Purchase Agreement provides for no capital outlay to the five hosts and a reduction of electricity cost. The same Agreement allows SolarVision to buy the solar arrays outright with investors who can take advantage of Ohio Advanced Energy Fund tax credits and realize sizable returns within a short period of time. Working in tandem with consultant David Probst of Stonehenge Structured Finance, SolarVision was introduced to Finance Fund which was instrumental in providing $5.6 million in new market tax credits that ultimately sealed the financing deal with First Merit Bank.
“This deal is a significant achievement for communities looking for economic development,” states SolarVision president, Greg Kuss. “What this says loud and clear is that these types of projects are viable and can happen.” SolarVision is in conversations with numerous communities about similar projects including green industrial parks and brightening brownfields in economically stressed areas in Ohio. This is the first deal of its kind known to occur in Ohio within the last several years.
“Deals like this one are extremely complex,” explains SolarVision vice president, Don Saul. “This transaction required eight separate LLCs.” According to Saul 39% of the transaction used tax credits and 80 percent of the $3.9 million loan with First Merit will be paid for within 12 months. The value of the new market tax credits were sold to Stonehenge Partners for the initial upfront investment to interest First Merit Bank in financing the deal. SolarVision owns the solar panel systems and the five entities agreed to buy power from SolarVision for a specified number of years. At the end of the term specified, the hosts can buy the solar systems at a fair market value and have all the benefits of the savings or sign on for a longer term.
Finance Fund is a statewide nonprofit financial intermediary whose clients include community-based nonprofit organizations and for-profit businesses serving low-income communities throughout Ohio. Finance Fund engages in creative approaches that build bridges between capital markets and economically distressed communities.
According to Finance Fund there are a very select number of attorneys, CPAs and others with experience in dealing with the nuances of energy and new market tax credits. “Stonehenge brought SolarVision to us. We looked at the 30-plus years of experience behind SolarVision and the Power Purchase Agreement they had in place all of which held our interest,” says Moniqua Spencer, Chief Program Officer of Finance Fund. “Our CEO is known for being an innovator. We are interested in green and renewable energy projects, which can be challenging. Solar energy financial projections are deemed conservation, but because this industry is evolving industry standards for comparison purposes are limited. We all took some risk in this deal.”
Last year Finance Fund received $50 million in new market tax credit allocation. Once transactions close, Finance Fund provides management and compliance. “The timeframe from application to closing on the SolarVision deal was four months and that was a reflection of all the work SolarVision did on the front end,” concludes Spencer.
“SolarVision’s unique business model has been met with great success,” states Kuss. The company plans to continue to expand its footprint throughout Ohio and into Pennsylvania and New Jersey this year.
About SolarVision, LLC:
A leader in renewable energy, SolarVision, LLC has developed a cost-effective solution for solar power systems that provides an immediate economic benefit. The latest inspiration from Energy Designs—founded in 1984 and one of the first product development companies focused on renewable energy—SolarVision, LLC brings a depth of experience and passion for sustainable energy alternatives. For more information, please visit www.solarvisionllc.net.