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Military Steps Up

That the U.S. military is taking a major role in renewables deployment isn’t news that much anymore. Still, a recent announcement shows how big that commitment is.

Project SolarStrong is a multi-year project worth more than $1 billion under which developer SolarCity will install, own, and operate rooftop solar systems on up to 160,000 privatized military residences on as many as 124 military bases across 33 states. The project would double the current number of residential rooftop solar systems in the U.S.

There’s another component of the project that’s worth noting – a large infusion of private capital in a renewable energy project that enjoys government aid through a federal loan guarantee. But the financing is entirely from private sources.

That’s the kind of news that gets lost in the current climate of budget austerity and allegations of waste when a project goes bad.

US Renewables Group (USRG) said it will provide $344 million in financing for the project.
 "This will be the first time that long term debt has been successfully deployed to finance a residential distributed generation project at such a large scale, resulting in a lowered cost of capital for the project that will enable an unprecedented expansion of U.S. residential solar power," said Ed Feo, managing partner of US Renewable Finance.

The U.S. Department of Energy’s Loan Guarantee Office has offered a conditional commitment for a partial loan guarantee to USRG Renewable Finance for the project, which covers up to 80 percent of a loan provided to a qualifying renewable energy project. USRG Renewable Finance will provide the financing in partnership with Bank of America Merrill Lynch.

The project will be financed entirely by private capital. It calls for installing a total of 371 megawatts of solar PV systems on military housing. SolarCity, which currently employs more than 1,200 people in 11 states, will create new jobs and help jumpstart the renewable energy industry in up to 22 additional states, some of which have very little solar generation capacity today.

SolarCity said it will seek out veterans to hire and train or family members of active duty military service members to install and maintain the solar systems.

The SolarStrong Project will have the added benefit of helping the Department of Defense (DOD), the single-largest energy consumer in the U.S., secure its energy needs from domestic renewable sources that are independent from the utility grid, at no additional cost to taxpayers. DOD has a stated goal that 25 percent of all energy consumed by 2025 shall be supplied from renewable sources.

The project will be rolled out over five years, starting with a four megawatt installation at Hickam Air Force base in Hawaii, with construction currently underway. SolarStrong is expected to sell electricity produced from the projects through long-term electricity sales agreements or lease solar systems through long-term lease contracts.

The SolarStrong projects will likely include installing solar on other privatized buildings on military bases, such as community centers, administrative offices, maintenance buildings and storage warehouses.

Some interesting news in a week when public-private energy partnerships have gotten a bad name.

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