Community solar developer Summit Ridge Energy lined up its second tax equity financing commitment from Foss & Company, raising $67 million for a 50 MW community solar portfolio of 13 projects under development in Maine and Illinois.
The investment utilizes the Inflation Reduction Act’s (IRA) Qualified Advanced Energy Project Credit program. Once guidance for low- and moderate-income community incentives and domestic content requirements program is finalized, the developer expects to expand its partnership with the tax investor to fund additional projects in underserved and traditional energy communities.
The funding supports a development pipeline to provide residential and commercial subscribers with clean energy and an opportunity to support the local renewable economy. The company has raised $122 million in tax equity commitments from Foss since partnering with the institutional investor in April 2021.
“In addition to targeting robust cash flow and economic returns for our investors, this portfolio is expected to increase access to low-cost clean energy for thousands of families and small businesses in Illinois and Maine,” said Bryen Alperin, managing director of Foss & Company. “This investment will allow us to continue building upon our current partnership with SRE, as well as advance our long-term mission of supporting a renewable energy future for all.”
Summit Ridge started construction on the 50 MW portfolio early this year and expects to achieve commercial operations in 2024. Once operational, the projects will generate clean power and energy savings for residential and commercial customers across six utility service territories. Commercial customers include small to large businesses who will remotely subscribe to the community solar projects.
At the Solar Energy Industries Association’s (SEIA) Finance, Tax & Buyers Seminar on March 21, Foss & Company’s Alperin told a tax equity panel audience that with the massive IRA legislation currently being disseminated and parsed out via guidance, “there’s more projects out there right now than investors.” With additional guidance pending on transferability, or the selling of tax credits, and other incentives under the IRA, the solar project development market is currently in a bottlenecked pattern, with developers and investors both awaiting further clarity as projects get pencilled in, but not built, Alperin said.
Transferability was the number one topic at the SEIA Finance seminar this month, with many policy advisors including Seth Hanlon of the Department of Treasury saying that federal guidance on the tax credit transfer provision could come within a matter of weeks. This year, companies with taxable income will be allowed to transfer investment and production tax credits, along with other tax credits, for cash to unrelated parties, and the proceeds from the transfer is not treated as taxable income.
Summit Ridge was formed in 2017 by Steve Raeder and Brian Dunn after the pair helmed SunEdison’s East Coast commercial and industrial solar business and served as vice president of the Hunt Companies’ distributed solar group, respectively. The company has developed community solar and rooftop distributed generation projects in Illinois, Maryland and Maine. In Illinois, the company has 250 MW of solar projects constructed and in development. In July, Summit Ridge raised $175 million from Apollo Funds to fund geographic growth expansion and other initiatives.
In December, Summit Ridge partnered with the 548 Enterprise, Ecademy and Power52 Foundation to launch the “Sustainability Hub” on Chicago’s West Side to train more than 10,000 residents over the next decade. The solar apprenticeship program is a 13-week (450 hour) training program targeting veterans, formerly incarcerated citizens returning to the workforce (returning citizens), and high school-aged adults from underserved communities. Summit Ridge is committing $600,000 in seed capital over the next two years for the program’s launch. To participate or learn more about a training program, visit www.548enterprise.com/foundation.
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It’s great to see community and neighborhood scale solar power projects receiving more interest and funding. I hope these rapidly developing projects, whereever they are, will seriously consider a more agri-solar approach while in their planning stages. This bi-functional use can have many future applications.