New Resource Bank’s exceptional expertise in commercial solar lending is helping communities and businesses across the country boost their use of renewable energy: the bank provides financing for solar installations of up to 3 megawatts, primarily in California.
“We’re in a unique position to offer this lending product,” says Matt Scullin, vice president and solar specialist. “We have people in-house who have an in-depth understanding of the solar industry, and we know the ins and outs of solar financing.”
New Resource: a solar financing pioneer
The bank established itself in the commercial solar market shortly after opening its doors in late 2006. In January 2007, the California Public Utilities Commission launched the California Solar Initiative, a rebate program for homeowners and businesses. Once those incentives kicked in, solar commercial lending opportunities opened up, and New Resource saw a natural fit with its sustainability mission.
Those years of experience mean New Resource can quickly assess the risks and the opportunities presented by a particular deal, and can move forward quickly if it’s viable, Scullin says, adding, “We understand what can and can’t be done.”
Among the challenges of solar financing are projects based on power purchase agreements (PPAs), which are long-term agreements between a solar energy provider and a client such as a business owner or municipality, and the fact that most loans are non-recourse, meaning the lender has a lien on the assets of the solar project only—there is no secondary source of collateral or repayment.
“Compared to other banks, we are more comfortable with the non-recourse element,” says Scullin. “To address this risk, we work with insurance companies who will help us cover ourselves for those solar projects that underperform.”
In addition to their experience with the complexities of PPAs, New Resource bankers also have a deep knowledge of tax equity investing requirements and a track record of working with government subsidies.
Customers illustrate the impact
A few examples of the bank’s solar expertise at work: Tioga Energy, a provider of renewable energy services to commercial, government and nonprofit institutions, turned to New Resource for a customized line of credit that enables Tioga to develop solar installations nationwide. The company now has about 100 projects in operation or under development. (See the story.)
International solar power developer Enfinity is relying on New Resource to finance its expansion in California and elsewhere in North America. (See the press release.)
Through its partnership with Adam Capital Clean Energy Asset Finance, a solar energy finance firm, New Resource is providing much-needed capital to an underserved market sector: small-scale solar developers, including home owners, small businesses, nonprofits, schools and low-income housing developments. (See the press release.)
Clients like these, says Scullin, appreciate New Resource’s expertise with commercial solar financing, and other clients appreciate knowing that their deposits are helping to increase renewable energy use. “Our customers are glad to know that their deposits are funneled into these projects,” says Scullin.