Up to 30 megawatts of solar projects are on their way to the nation’s capitol, as New Columbia Solar has closed on the largest tax equity agreement for solar development that D.C. has seen.
New Columbia Solar was able to secure $40 million via a partnership with Franklin Park Infrastructure. The investment will enable New Columbia to finance approximately 30 MW of D.C.-based solar projects throughout 2020 and 2021, according to the company. New Columbia will also hire an additional ten employees this year.
According to the most recent data from SEIA, The District is home to 91 MW of solar, meaning that the new capacity brought on by this financing will represent a 33% increase.
An immediate presence
The new solar capacity will be well met in D.C., which is home to the most aggressive renewable mandate in the country, at 100% renewable by 2032. What’s more is that New Columbia works in the commercial space, with most projects coming in at under 100 kW, according to CEO Mike Healy. While this may have made coming across financing more difficult to market in other areas of the country, it’s a feather in New Columbia’s cap in D.C., where space for large projects is scarce.
“Most of our projects are on multifamily buildings, schools and some of the industrial facilities that are still in The District,” Healy said. “Last year, we did just under 100 projects. This year, we expect to do north of 120 projects. We’re doing a whole bunch of projects that are all over the place.”
“That’s one of the really unique things about our partnership with Franklin Park,” added New Columbia Project Finance Manager, Shane Lebow. “They really understand the box which we operate and develop in. We’re doing a lot of projects, like Mike said, but they’re not exactly cookie-cutter, like residential projects. These are distributed generation assets that have different features, different customers, and Franklin Park has been great because they understand the value that lies in that.”
Tax equity without tumult
This investment brings the company’s total project investment capital for 2020 to $50 million, with eyes to expand that number to $120 million through 2021. Furthermore, the deal comes at a time when tax equity financing is expected to slow down considerably, an event Lebow says the company was able to avoid completely.
“Part of the way that we were able to de-risk it is that we were in exclusive negotiations before the Covid-19 downturn,” Lebow said. We had a head start on everything and because of that, we were able to just keep our heads down and just focus on what we could control.”
The agreement marks Franklin Park’s entry into the tax equity market as an investor.