CollectiveSun to fund $4 million of solar projects for faith-based organizations

CollectiveSun and others featured in a Solar Financing Spotlight in Solar Builder Magazine, December 21st, 2023

Solar developers have been securing loans to support projects from the Atlantic Coast, to the South and the Pacific Northwest. Origis Energy, CollectiveSun and DC Green Bank lead this installment of the Solar Financing Spotlight.

Origis Energy has finalized a $344 million construction financing facility and conversion to term loan with MUFG for the Golden Triangle I solar + battery energy storage project in Lowndes County, Mississippi.

Golden Triangle I, with 200 MWac solar capacity co-located with 200 MWh of energy storage, is one of three Origis Energy renewable energy projects under construction in the state, representing the largest solar + battery energy storage deployments in Mississippi to date. Construction was announced earlier this year on the three projects, Golden Triangle I, Golden Triangle II and Optimist, with a total capacity of 550 MWac solar plus 600 MWh of battery energy storage. The projects will deliver clean energy and grid resiliency at competitive rates under power purchase agreements executed between Origis Energy and the Tennessee Valley Authority (TVA).

Golden Triangle I is supported during construction and long-term operation with this loan facility. Once construction is finished the financing will be converted to a long-term instrument covering operational life of the project (~25+ years).

Additionally, the loan facility structure leverages the transferability provision of the Inflation Reduction Act (IRA) prior to commitments for tax equity financing.

“The MUFG team has been outstanding. They have worked with us to uncover innovative ways to leverage the IRA provisions and ensure the Golden Triangle I project delivers for TVA and its customers as promised,” said Vikas Anand, Chief Operating Officer & Chief Financial Officer, Origis Energy.

“We are proud to have partnered with Origis on this construction financing facility and conversion to term loan,” said Patrick Klein, Senior Originator on the Project Finance Americas team at MUFG and Golden Triangle I Transaction Lead. “Supporting our clients’ development projects and business goals is one of the tenets of our bank, and we relish the opportunity to come up with creative solutions to their financing needs.”

CollectiveSun to fund $4 million of solar projects for faith-based organizations

CollectiveSun Foundation has established a credit facility to fund $4 million of solar projects for exclusively for faith-based organizations.

CollectiveSun Foundation is a 501(c)3 nonprofit organization and philanthropic arm of CollectiveSun dedicated to advancing climate-friendly projects. The credit facility was created in partnership with the Interfaith Solar Campaign, whose mission is to promote solar energy adoption within faith-based organizations and their surrounding communities.

The credit facility is expected to fund 25-30 projects in Oregon and Washington, providing a model for expansion to faith-based communities nationwide. These projects will add to CollectiveSun’s growing pipeline of solar projects, which includes over 200 completed projects for nonprofits across the U.S., over half of which are for houses of worship.

With support from BQuest Foundation, an impact investing based private family foundation, and Cornerstone Fund, a nonprofit financial institution that finances faith-based impact projects, the credit facility will be guaranteed by the Community Investment Guarantee Pool (CIGP). It is intended to expand access to solar project financing specifically for faith-based organizations.

The Inflation Reduction Act (IRA) has increased opportunities for faith-based organizations and other nonprofits to benefit from solar energy. But it’s still challenging for nonprofits and especially houses of worship to access funding. These faith-based organizations are often excluded from traditional financing options or have limitations on the amount of funding they can obtain. This new credit facility, the first ever to be dedicated to faith-based organizations, addresses this issue.

CollectiveSun Foundation will manage construction, own, and operate the solar systems. Funding will be provided via the credit facility’s landmark three-party funding structure, which includes capital from two nonprofit foundations and a loan guarantee from a third nonprofit foundation. When a project is placed in service, CollectiveSun Foundation will manage all the required tax credit filings and integrate tax credit gap financing into the structure. This approach allows for financing the tax credit gaps that would otherwise present a burden for a nonprofit.

“Faith-based organizations have historically been locked out of traditional financing options due to a lack of understanding and appreciation for the special connection and role they play in providing spiritual and critical social services in their communities. Where most lenders see risk, we see vibrancy and strength,” said Lee Barken, chief community officer of CollectiveSun. “With this new credit facility and thanks to our values-aligned partners, we can now support numerous faith-based organizations in achieving their renewable energy goals.”

The solar projects that can be funded by the credit facility go beyond houses of worship. They include other kinds of facilities operated by faith-based organizations, such as food banks, affordable housing, retirement communities, and more.

Interfaith Solar Campaign has already helped several churches go solar, and the organization is currently in discussions with about 40 congregations of diverse faiths in Oregon and Washington. They have identified 30 other potential churches in lower-income communities that can benefit from the IRA’s low-income communities bonus adder. The campaign’s vision is to extend their reach to all qualified faith-based communities in the region and across the country.

“This innovative credit facility will help us build momentum for faith-based communities to lead the transition to renewable energy,” said John Pitney, retired United Methodist minister and Director of Outreach at Interfaith Solar Campaign. “While some houses of worship around the country have already installed solar, they’ve mostly done that in isolation. Collectively, we can have a much greater impact. We’re creating a movement of faith communities that, by putting solar on their buildings, are inspiring and motivating their congregants to take climate action as well.”

DC Green Bank, Copernican Energy close on $500,000 loan to support solar projects in D.C.

DC Green Bank and Copernican Energy closed on $500,000 in construction-to-permanent loan to support a 191 kW residential solar project portfolio in Washington, D.C.

This investment will provide solar energy to approximately 23 low- to moderate- income (LMI) households, with more than 90% of the beneficiaries located in Wards 7 and 8. In addition to the environmental benefits, residents will experience a minimum 50% reduction in household utility bills.

“This project supports Mayor Bowser’s goal to create clean energy jobs and make affordable solar energy accessible to all District communities,” said Trisha Miller, CEO at DC Green Bank. “We know when we invest in emerging developers like Copernican, there are numerous co-benefits – like job creation and lower utility bills – that emerge for communities as well. We are excited to continue to replicate this model with our partners across DC.”

All solar projects in the portfolio are expected to be completed by the end of 2023.