|SOLAR CAPITAL LEASE – 100% project cost. No Capital Investment|
NEWS – FOR IMMEDIATE RELEASE
Date: April 10, 2013
Charleston, SC. – Solar Capital Leasing has recently introduced a Capital Tax Lease that provides for 100% project financing for renewable energy projects in excess of $250,000. This lease offers a unique and proprietary financing solution for business, municipalities, schools, non-profits, government and others having an interest in developing multiple solar power installations in the small (50 kW) to medium (1 MW) size range.
The funding program is available to qualified projects in selected markets including Massachusetts, Connecticut, New York, New Jersey, Rhode Island, District of Columbia, Maryland, Delaware, Georgia, North Carolina and Tennessee. Apply Online.
The Solar Capital Lease is underwritten by US based Fortune 500 companies having extensive experience in financing renewable energy projects in the US and selected Internationally markets (Canada, Caribbean). The program provides both the construction and take-out financing for terms up to 30 years and at competitive rates i.e. 3.5% – 5% range depending on the credit worthiness of the project host.
Prior to the introduction of the Solar Capital Lease project developers commonly found project financing difficult due to a number of factors.
According to David Weiler, CEO, Solar Capital Leasing, “Renewable energy projects are a unique asset where the future market value of the underlying asset collateral is difficult to establish and cash flows are difficult to confirm due to uncertain power production and the resultant revenue”. He further stated that “project developers often lack access to equity funds i.e. skin in the game to satisfy the bank and lenders can only offer high coupon rates and limited amortization terms which puts additional economic pressure on the business case of the project.
THE SOLAR CAPITAL APPROACH
Commercial banks do not typically provide a viable source of project funding due to their attachment to long-standing underwriting practices of focusing on the value of the underlying asset, imposition of debt coverage ratios and demand for developer equity in the capital stack.
Project financing has typically been combined with some component of debt financing and private investor equity contribution, with the private investor’s motives driven primarily by tax-related benefits. The repetitive need to obtain and package Bank debt with private investor capital for each project has proven to be a significant impediment to the ability of the developer to fund new projects.
In light of these challenges, the SCL team looked to practices already long in-place in the commercial property structured financing markets to provide a solution.
The approach relies on the credit quality of the project income stream, with virtually no emphasis on the nature of the renewable energy technology or physical assets. Solar Capital Leasing provide 100% project cost debt financing, with extended amortizations out to 25 or even 30 years.
Finally; the Solar Capital Lease does not seek to obtain any portion of project tax benefits. This allows the project developer to capture, or barter, these benefits to their own gain.
In summary – the Solar Capital Lease Program is driven by the credit quality of the transaction lessee and transactional documents that provide bond investors with default protection.
For more information contact:
Solar Capital Lease
Tel: 843-576-0112 x 121
Solar Capital Leasing
Solar Capital is a financial services and project development company providing renewable energy solutions through photovoltaic (“PV”), solar thermal and wind technologies.
The company levers its energy knowledge expertise, investment banking expertise and procurement processes to help municipalities, schools, non-profits, government and businesses maximize energy savings and reduce carbon emissions.