U.S. Bancorp (USB:US) and National Consumer Cooperative Bank created a $64.4 million fund to finance photovoltaic systems that Borrego Solar Systems Inc. will install.
The fund will support construction of eight projects with 18 megawatts of generating capacity, including four at municipal landfills and one for a school district, San Diego-based Borrego said in an e-mailed statement. It has raised a total of $225 million in project financing since 2009, and the new fund is its largest, the company said.
Borrego’s customers buy the electricity from systems it installs through a financing arrangement known as a power purchase agreement. The structure eliminates the need to pay upfront installation costs, and the power is bought at a fixed monthly rate that’s lower than a typical utility bill, according to the company.
Investors that create installation funds for solar developers can take advantage of a 30 percent investment tax credit for solar energy.
National Consumer Cooperative Bank is providing debt for the fund, David Lipson, a Borrego spokesman, said by e-mail. “They can not take any of the tax benefits because they’re not an owner,” he said of the NCB. “U.S. Bancorp is Borrego Solar’s equity partner and the two of us, as owners of the projects, will take the 30 percent ITC and depreciation.”
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