SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Ethos Green Energy Asset Finance LLC, the leading collateral-based lender serving a niche market of renewable energy developers, today announced an agreement to extend a $300,000 loan to Solar America LLC, the first renewable energy loan secured primarily by newly available federal grant payments made in lieu of tax credits.
On July 30, 2009 the U.S. Department of the Treasury and the U.S. Department of Energy began accepting applications to pay renewable energy developers 30 percent cash back on the entire value of the system once installed. The program converts an already existing federal tax credit into direct cash payments in the form of a non-qualifying grant. This program is part of the American Recovery and Reinvestment Act (ARRA).
“Ethos was created to offer collateralized loans to bundled residential and commercial renewable energy developers of 10-200 kilowatt (kW) systems in rebate-rich West Coast markets,” said Adam Boucher, founder of Ethos Green Energy Asset Finance. “We have been eagerly anticipating Treasury’s announcement regarding the procedures for renewable energy developers to apply for these cash payments so that we could begin making this type of loan.”
Solar America LLC, in a joint venture with Broadstreet Energy Corp., will use the Ethos loan to support its development of residential and commercial solar initiatives and extend its capacity in the Los Angeles market. Solar America’s current installations and future projects include a combination of residential, non-profits (churches, synagogues, mosques, etc.), and commercial (manufacturing facilities) across the greater Los Angeles region, including the San Fernando Valley, West L.A. / Hollywood, and Northridge.
"Our focus is the City of Los Angeles utility customers and these funds help us to install solar systems with almost no upfront cost to the customer," said Ahmad Yakub, founder and CEO of Broadstreet Energy Corp.
“This loan is an industry first and reflects Ethos’ innovative lending model, which we believe will play a critical role in addressing America’s energy, economic and environmental challenges,” noted Boucher.
Operating on the cutting edge of the ARRA legislation, Ethos aims to provide financing for a diversified portfolio of niche market bundled residential and commercial renewable energy producers in areas such as solar, solar thermal, waste energy recovery, biomass and small wind. Since Ethos accepts these new federal payments as a source of collateral for renewable energy loans, Ethos can now help many small energy developers overcome the lack of funding for renewable energy projects that require loan amounts from $250,000 to $1 million.
Historically, the niche market that Ethos serves -- renewable energy producers building systems between 10 kW and 200 kW -- has been underserved by the financial industry. The typical developer in this area of the green energy marketplace lacks the capital to deploy its renewable energy systems, a necessary step to qualifying for rebates and other government backed financial incentives. Banks will not extend loans without proof of historical cash flow, venture capital and hedge funds generally seek more volatile growth potential, and large private lenders seldom consider loan requests under $5 million.
By loaning against a new class of assets -- the credits and rebates available for renewable energy production in the federal government’s recent energy incentive package, combined with existing incentives offered by states such as California, Arizona and Oregon -- Ethos can, in some cases, finance up to 100 percent or more of the cost of a renewable energy project.
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