Community solar developer OYA Renewables has secured $216 million in financial backing to fund 15 projects throughout New York.
A majority of the financing is a construction-to-term loan with CIT Power and Energy acting as lead for a syndicate of participants including Amalgamated Bank, Siements Financial Services, Comerica Bank and Cadence Bank.
The remaining $71 million is secured with Monarch Private Capital as a tax equity investment. The 15 projects are part of OYA’s 2023 pipeline for New York community solar works statewide.
“The level of financial backing we’ve secured via these commitments is another major milestone for OYA,’ company Chairman and Co-Founder Manish Nayar said in a statement. “Not only does it significantly increase our asset base, it also advances our transition from being a developer to an independent power producer.”
Community solar projects are built in scopes somewhere between utility-scale projects and smaller, distributed energy and behind-the-meter projects. Instead of the rate hikes that utility customer might bear for massive projects, or the huge personal expenses of residential solar, community solar developers handle upfront costs and customers can subscribe to the generation output.
New York is aiming big for carbon reduction projects to reach Net Zero emissions status in coming decades, so OYA has been working to develop more community solar projects in the Empire State with an eye toward those customers who might not otherwise be able to afford it.
“If you can afford a Tesla, you can probably afford residential solar,” Nayar noted in an earlier interview with EnergyTech. “But community solar is really serving folks that are renters—that’s the majority of population in the U.S. It’s expands access to clean energy to those folks who don’t have to pay money out of pocket and can see savings on their first bill.”
Monarch Private Capital will participate in the funding of OYA’s slare of 2023 projects via the investors’ ESG-oriented impact funds. MPC investors will then receive a federal tax credit for the renewable energy proportionate to their level of ownership, as well as cash flow from proceeds once the solar farms are up and running.
Several of the projects located within low-income communities will qualify for additional tax credits of up to 20%, taking the total potential credits from 30% to as high as 50%, according to OYA.
“These types of investments from highly-progressive banking partners are critical to the financing of renewable energy projects,” Nayar added. “Without them, we wouldn’t be the major force we are in the NY community solar market and the US energy transition could not have generated the incredible momentum it’s seeing now.”
The 2023 slate of projects being funded by the combined transactions are located throughout New York State and are expected to generate almost 100 MW (dc) of renewable energy per year once complete.
Subsequent pipeline projects that will form part of OYA’s 2024 slate are currently in preconstruction or late stage permitting.
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(Rod Walton, senior editor for EnergyTech, is a 15-year veteran of covering the energy industry both as a newspaper and trade journalist. He can be reached at [email protected]).
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