Impact Investments Bring Affordable Renewable Energy to Maine Towns

A collaboration between CEI and The Nature Conservancy helps municipalities install solar arrays with no money down as developers are able to pass along better project pricing.

Across rural Maine, municipalities are increasingly flipping the switch to solar power, made more affordable with creative financing solutions from Coastal Enterprises (CEI). Now, thanks to a new impact investment collaboration with The Nature Conservancy (TNC), CEI can reduce the cost of installation, making renewable energy accessible and affordable for communities, which will also benefit from significant energy cost savings over time.

On February 23, 2019 the Town of Tremont will hold a ribbon cutting ceremony to celebrate its new solar array, installed on the town’s capped landfill. The array will generate 100 percent of the electricity needed for the town’s municipal buildings. The project was made possible through this innovative impact investment structure.

Sundog Solar installed the 153 kW solar array with no upfront cost to the town. Instead, the town has a six-year lease agreement with Tremont Solar, LLC which owns and operates the equipment. Because of the loan terms it received from the CEI and TNC partnership, Tremont Solar is able to sell the power to the town at an attractive rate: Savings from the array are expected to reach $400,000 in electricity costs over the next 25 years.

“This solar project is a win-win for the community of Tremont,” said Tremont Town Manager Christopher Saunders. “It lowers the town’s long-term energy costs and is good for the environment.”

In order to make the loan terms on this and similar projects more appealing, TNC makes small zero-interest loans to CEI to include in its lending package to solar developers. This enables CEI to charge a lower interest rate to the developer, who then can pass along that benefit to customers in the form of more attractive power purchase agreements (PPAs). In the case of Tremont, the town has the option to purchase the panels after six years.

CEI and TNC collaborated on a similar model with Searsport-based Sundog Solar in the Maine town of Waldoboro last year and have other potential projects under consideration in the pipeline.

“This impact investment is helpful to our signing municipal customers,” said Sundog Solar Owner Chuck Piper. “Because of the nature of the PPA it helps lower the cost of the capital which make the project more viable for the customer. A lower cost of capital trickles down to the municipality in the form of a lower cost for electricity.”

Sundog Solar- Town of Waldoboro

Solar projects are by nature more complex investment structures, due to calculating the variable pricing of the multi-year electricity costs, or PPAs, not simply equipment and installation costs. CEI has developed a specialty in constructing renewable, and specifically solar energy transactions and to date has financed 7.1 MW of total solar production across 25 projects in Maine and New Hampshire, ranging from college campuses to the roofs of municipal water and sewage treatment facilities. Only the Tremont and Waldoboro projects use the additional funds from TNC.

“This kind of innovative finance is an investment in Maine’s future,” said CEI Chief Investment Officer John Egan. “Climate investors and partners like TNC can participate in creating an investment that impacts people and the planet for the long term.”

The collaboration between CEI and TNC is timely. In a 2017 survey of Maine municipalities conducted by TNC 68 percent said energy costs are a significant or moderate concernto their community. Further, 55 percent said they are very or somewhat interested in installing solar panels on municipal buildings or property yet cite inadequate tax revenue or grant funding for moving ahead.

“When municipalities choose to go solar, the community as a whole benefits,” said TNC Maine Energy Policy and Projects Advisor, Rob Wood. “We are grateful to CEI for providing a platform to make investments in Maine’s towns and our environment.”

About CEI
Coastal Enterprises, Inc. (CEI) helps to grow good jobs, environmentally sustainable enterprises and shared prosperity in Maine and other rural regions by integrating financing, business and industry expertise, and policy solutions. As a mission-driven investor, CEI works closely with individuals and businesses to address operational, workforce and environmental challenges, focusing particularly on key natural resource-based industries that can contribute to an inclusive and environmentally sustainable economy. Visit www.ceimaine.org for more information.

About TNC
The Nature Conservancy is a global conservation organization dedicated to conserving the lands and waters on which all life depends. Guided by science, we create innovative, on-the-ground solutions to our world’s toughest challenges so that nature and people can thrive together. We are tackling climate change, conserving lands, waters and oceans at an unprecedented scale, providing food and water sustainably and helping make cities more sustainable. Working in 72 countries, we use a collaborative approach that engages local communities, governments, the private sector, and other partners. To learn more, visit www.nature.org or follow @nature_press on Twitter.

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