Renewal under the Sun: $203M Bank Financing positions Pivot Energy for new Community Solar portfolio

May 9, 2023
Recently collapsed Silicon Valley Bank, now operating under the ownership of First Citizens Bank, is lead arranger on the deal that repositions the "lender to startups" as a key player in Community Solar financing

The banking sector may feel a pinch lately due to various falls and collapses worrying the entire economy, but the bold moves to invest into energy transition sectors apparently prove that rumors about the death of such deals are greatly exaggerated.

Solar power provider Pivot Energy announced Tuesday that that it has closed on a $203 million financing facility to support a developing, multi-state portfolio of distributed generation projects. Earlier this week, e-mobility solutions firm Gage Zero announced it had gained a $300 million equity commitment from ARC Financial to support fleet electrification work.

A new wing of First Citizens Bank only recently in the headlines, Silicon Valley Bank, will lead the debt facilities on the Pivot Energy transaction, while investment management firm Foss and Company will make the initial tax equity investment in the same work.

The Pivot Energy portfolio will include 100 MW across 35 community solar and commercial and industrial (C&I) projects across seven states between now and the second quarter of 2024.

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The lineup of projects is Pivot’s second portfolio the company will build, own and operate since it was acquired by ECP in 2021. The commercial solar subscribers include commercial clients, municipalities, healthcare facilities, food service, retail and residential customers.

“This initiative will expand access to clean, affordable energy for small businesses and low-income households, reinforcing our commitment to invest in tax equity within under-served market segments,” Bryen Alperin, Managing Director at Foss & Company, said in a statement. “Furthermore, it is expected to generate substantial environmental benefits, aligning with our vision for a more sustainable future."

It's also a big rallying statement for the Silicon Valley Bank side of the financing deal. SVB was a preeminent, fast growing and standalone financial institution well-known for investing in the clean energy and sustainability sectors, but it collapsed earlier this year after getting negatively lopsided on its own bond investment portfolio and after a run on the bank by depositors.

A month later, North Carolina-based First Citizens acquired SVB’s assets out of federal receivership. First Citizens acquired SVB as a whole bank purchase with some protection from the Federal Deposit Insurance Corp., buying some $110 billion in assets, $56 billion in deposits and $72 billion in loans, according to the release about the deal.

Prior to its collapse, SVB boasted of big plans for investing in energy transition startups helping to spur new technology for decarbonization. This week’s financing deal for Pivot Energy puts that commitment back to life, the companies and lenders say.  In a multi-partner transaction almost certainly initiated before its financial struggles, SVB nonethless has emerged as a continued player on the renewable energy financing front, if not yet the top lender again. 

“This transaction additionally highlights that SVB continues to be a leader in the community solar financing space,” Bret Labadie, chief financial officer at Pivot Energy, said. “I am thrilled to continue this partnership and show the broader community solar space that SVB and First Citizens Bank remain committed to this important asset class.”

Community solar offers an alternative pathway for customers who might want more direct renewable energy access than provided by utility-scale projects but don’t want or cannot afford to make a bigger upfront financial commitment for on-site solar power such as rooftop PV. The residential part of the portfolio also will make community solar available to approximately 8,000 low-to-moderate income households, according to the release.

The projects will be sited across Colorado, Minnesota, Illinois, New York, Hawaii, Maryland and California.

The Pivot Energy deal is the first syndicated loan closing that SVB has led since its acquisition by First Citizens Bank in April. Prior to its troubles, SVB was a national leader in community solar project financing and also built fiscal connections to other energy transition firms such as Sunrun, Soltage, Plus Power, Leeward Renewable Energy and Bloom Energy, among others.

On both sides of the latest round, however, it’s a renewal of a partnership which began when SVB and Foss & Company acted as lead financing parties for Pivot’s inaugural portfolio that closed in 2022.

“Pivot Energy and ECP are front runners in transitioning our energy sources to affordable, clean, renewable energy for al, accelerating the growth of community solar across the United States,” Bret Turner, head of Project Finance, Business Development and Innovation for Silicon Valley Bank, said in the statement. “We are pleased to have led and structured this portfolio of solar projects across 35 sites in seven key markets. We appreciate the confidence and trust placed in the team at SVB to continue moving this asset class forward.”

California-based Silicon Valley Bank, under the First Citizens leadership, structured the debt transaction to include loans for construction, a tax equity bridge and term financing. SVB will be coordinating lead arranger, sole bookrunner and administrative agent on the deal with J.P. Morgan, National Bank of Canada, Bank United, Cadence and Commercia as lenders.

The deal marks J.P. Morgan’s first foray into financing community solar development.