The U.S. Department of Energy (DOE) has offered a conditional commitment for a loan guarantee supporting a 733 MW distributed solar rooftop project, NRG Energy, Bank of America Merrill Lynch and Prologis – the major stakeholders involved in the project – have jointly announced.
The project, whose total cost is estimated at $2.6 billion, is being financed entirely by the private sector over the next four years, the companies say. The project will be completed in phases, and of the first phase, 15 MW of solar capacity is immediately ready for construction and installation in Southern California, where the power generated will be sold to a local utility under long-term power purchase agreements that have been approved and executed.
NRG Energy has committed to be the lead investor for the first phase of the project over the next 18 months. In addition to funding the first phase of the project, the company has a right of first offer for the remainder (up to the program total of 733 MW) and will provide development resources and project expertise for the installations.
Bank of America Merrill Lynch will be the sole financial and structuring adviser and sole lender on this transaction, which is being executed under the DOE's Financial Institutions Partnership Program (FIPP). Through FIPP, the DOE will guarantee 80% of the $1.4 billion debt financing for this transaction.
Prologis will provide site access to rooftops and will also act as developer, construction manager and program sponsor, in addition to making an equity investment.
"NRG believes rooftop solar is a smart choice for industrial, commercial and residential property owners in markets around the country, and this program provides the commercial scale that will bring the benefits of solar power to customers across the country," says Tom Doyle, president of NRG Solar, NRG's solar subsidiary." This program will nearly double the amount of grid-connected solar online in the United States today and make another positive contribution to cleaner air and a healthy environment.’