CollectiveSun and their partner, Greenworks Lending, teamed up to present a webinar on zero down financing for nonprofits seeking to go solar. Hosted by Solar Power World, the webinar was titled The Key to Solar Recovery & Closing Sales – Easy $0 Down Financing for Nonprofits and featured Tim Olson, Director of Solar and Storage at Greenworks, and CollectiveSun’s Vice President of Sales, Matt Brennan. They both described their respective companies and their offerings as well as their joint financing vehicle, CollectivePACE, and its qualification process.
Throughout the presentation the speakers highlighted how CollectivePACE can benefit solar contractors looking to attract nonprofits. In the beginning Tim spoke of the timeliness of the webinar and an offering like CollectivePACE given the current changes in the economic landscape nonprofits are experiencing with COVID.
Two Mission Driven Companies and Their Offerings
Tim described Greenworks as a 100% private capital provider committed to helping commercial property owners across the country decrease their energy and water usage through affordable financing. He characterized their funding vehicle, Commercial Property Assessed Clean Energy (C-PACE), as one that provides 100% financing at a low fixed rate over a long period of time (up to 30 years) with payments made through the property tax bill. Rather than having to put up cash or go to a bank for a shorter term loan, nonprofits can secure financing through a C-PACE loan that helps them significantly bring down their annual payments.
Defining Greenworks as an organization that offers white glove service, Tim explained that his company walks both contractors and property owners through the entire process from sales to underwriting and application, closing and project execution.
Matt went on to discuss CollectiveSun’s expertise in finance and renewables and their main product, a prepaid service contract called a Solar Power Agreement (SPA). Available wherever third party ownership is allowed, the SPA monetizes the solar tax credit and enables customers to receive a 12% or more tax-like credit for solar systems 50kW and larger. Matt stated that CollectiveSun owns, operates, maintains and provides a production guarantee for the system for the first 6 years and then transfers ownership of the system to the customer for a net cost of $0.
He explained that, in addition to schools and faith-based, housing and recreational organizations, there are a whole range of organizations that CollectiveSun works with across the country, including for-profits without a tax appetite.
Power of the Zero Down Option
The speakers then introduced CollectivePACE, the combination of the SPA and C-PACE. CollectivePACE is an offering where Greenworks funds the first 88% and CollectiveSun funds the last 12% or more. This results in an option for nonprofits that is zero down. Matt described it as a very simple process that makes it easy for property owners to get funding and contractors to close on projects.
Matt went on to explain that with CollectivePACE customers keep the SRECs and other utility rebates. They also tend to enjoy a payment grace period given that property taxes are due once a year and don’t end up consuming debt capacity with debt providers. Additionally, Matt clarified that CollectivePACE works for nonprofits that don’t pay property tax because these organizations are still on property tax rolls.
Drilling down into the power of the C-PACE aspect of CollectivePACE, Tim described how the loan covers 100% of both hard and soft costs like feasibility studies or restructuring. In many states it can even cover non-solar elements like a new roof needed to be able to put solar on the building or improvements like a new HVAC system or energy efficiency upgrades. Including these kinds of expenses in the loan can help nonprofits reserve capital for more mission focused activities.
Tim also highlighted the fact that given that the loan is placed on the tax bill it stays with that property on sale, a typical concern for property owners. He reiterated Matt’s observation that a C-PACE loan preserves the organization’s credit and borrowing capacity for when they want to take out a loan for something else with their bank, a fact that can be another selling point with property owners.
Real World Example
Tim then stepped through the funding of the California based Merced Golf & Country Club solar system. Ultimately, the golf club installed a 305kW carport and rooftop system with CollectiveSun providing a $100,000 discount and Greenworks offering $640,000 financing over 25 years. The club saved $42,000 their first year with a net savings of almost $2 million for the lifetime of the system. Tim also explained that Merced was a potent example of a project that was about to fall apart and was rescued by the solution offered by CollectivePACE.
A Streamlined Qualification Process
Next, Matt illustrated the CollectivePACE qualification process. He explained that it involved just two agreements, the C-PACE loan with Greenworks and the SPA with CollectiveSun. He listed the information needed from the property owner in order to address project qualification and offer annual loan payment and cashflow information. Matt also explained what was needed in a contractor’s total cost and insurance coverage.
Thank you to Greenworks Lending for collaborating with CollectiveSun on this webinar.
By Sara Carbone