New Financing Option for Wind Developers

by David Wagman, Chief Editor, REWNA Magazine
Published: May 17, 2010


Wind power plant developers have an additional financing option available to them, thanks to changes in federal tax law. Previously, production tax credits were available to parties that owned, operated and sold electricity generated by the wind project. The changes now allow for leasing entities not directly engaged in project operations to claim either investment tax credits or to qualify for an ITC cash grant in lieu of production tax credits. This additional flexibility broadens the financing options available to project developers.

And that opens a new source of money for developers, said Lance Markowitz, senior vice president and manager of the Leasing and Asset Finance Division of Union Bank, N.A., which has been in the power business for close to 30 years. Markowitz, a Los Angeles native who graduated from the University of Colorado at Boulder, leads a division that focuses on providing finance to the renewable energy sector, largely in the U.S. and Canada. The division also actively provides construction and term loans for renewable energy projects.

In 2009, the unit served as lead arranger for eight construction and/or term-debt financings totaling some $1.7 billion and representing 950 MW of capacity. It also was a lead investor in nine wind and solar projects. Union Bank has partnership or lease investments in 20 renewable energy projects aggregating over 1,750 MW and $3.7 billion in value.

Leasing options can be attractive because they can provide more incremental financing and help clarify the extent of a firm's financial obligation, Markowitz said.

"In a flip structure the cash is either shut off or turned on," he said. As a result, a developer may see no cash at all. Under a rental obligation, certain coverages relative to cash flow are targeted. The result is more consistency across the project lifetime. "We're getting rents, tax benefits and residual benefits" which, when compared with the loan or partnership over 10 years, result in a larger financing amount, he said.

Markowitz set up a lease structure for a portfolio of four photovoltaic projects totaling 6 MW. Each project was bought individually, but the cash flow went into a waterfall structure made up of revenue collected, expenses paid and rent dispersed on the transaction.

"The developer got fairly significant financing," Markowitz said. A key component to writing a lease is to pay market value for the assets. For solar photovoltaic assets he said that was around $6 a watt "and prices are going down significantly."

Union Bank is part of the Mitsubishi UFJ Financial Group's (MUFG) project finance effort. Some clients include Acciona, AES, Enel, EnXco, Infigen, SunEdison, Terra-Gen Power and EME.

Markowitz and his two-person team, who include Melisa Wilson, senior vice president, and Kenji Ogawa, vice president, look for fully developed projects with a well-defined outlook. In evaluating a loan opportunity the bank considers the quality of the developer, the terms and quality of the resource power purchase agreement, the quality of the technology and the adequacy of the resource.

"We need to have confidence in the resource projections," he said. Land rights and water rights are also important review criteria.

Apart from its lending activities and partnership investments, Union Bank, N.A., has been active during the past decade in underwriting leasing solutions for the power sector. To date, Union Bank has been a lead investor in 14 power generation facilities that use a lease structure. These facilities aggregate over 4,500 MW and $4.3 billion in value.

For example, a U.S.-based chemical company wanted a 750 MW cogeneration facility, including steam for its own internal use and power to sell to the local distribution grid. Union Bank bought the project and leased it back to the chemical manufacturer for 20 years. The lessor earns a stream of rents and monetizes the depreciation and residual interest in the facility.

"We have interests in 5,000 to 6,000 MW through partnerships and leases," Markowitz said.

Leasing clients include AES, SunEdison, First Energy, Mirant and Calpine. While leasing in the renewable energy market remains nascent, Union Bank believes that leasing will become an increasingly important financing tool due to certain changes to the tax code as well as continued growth in the renewable energy market.

UnionBanCal Corp. is a wholly-owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd., which itself is a unit of Mitsubishi UFJ Financial Group, Inc.

Info Provided by:Scott's Contracting GREEN BUILDER, St Louis "Renewable Energy" Missouri.http://www.stlouisrenewableenergy.com, contact scotty@stlouisrenewableenergy.com for additional information

Stop Senator Murkowski's 'Dirty Air Act' twice in the last year. And with your help, we can do it again.

Scotty,

Senator Lisa Murkowski just doesn't take no for an answer. Right now, she's preparing to re-launch her lobbyist-penned, oil-company-supported, science-denying attack on the Clean Air Act -- with a vote as soon as this week.

The Murkowski "Dirty Air Act," written by the fossil fuel lobby1, would strip the Clean Air Act -- one of our most proven, effective tools to keep our air and water clean -- of the ability to regulate greenhouse gas pollution.

What's even more outrageous is that it does so by legislating against science: Murkowski's resolution overturns a comprehensive scientific finding that greenhouse gases hurt human health and welfare. Put simply: it would literally establish as the law of the land that greenhouse gases and climate change are not bad for people.

Sign our urgent petition calling on your Senators to Vote NO on Senator Murkowski's attack on the Clean Air Act.

Send a Message

We can't let Senator Murkowski or her fossil fuel-funded agenda succeed in gutting the Clean Air Act.

Unfortunately, Murkowski only needs 51 votes in the Senate to get her way, and it's going to be very close. There is some good news, though: Senator Murkowski only has until June 7 to push her resolution through. That's why it's vital for each of us to put as much pressure on our Senators as we can this week.

We know Repower America members like you can make a difference: We've already helped stop Senator Murkowski's "Dirty Air Act" twice in the last year. And with your help, we can do it again.

Sign the petition demanding that your Senators stand up to Senator Murkowski and the fossil fuel lobby -- and Repower America members like you will deliver your petition in-person to Senate offices around the country this week.

If we lose this vote, it will be a massive blow to efforts to solve the climate crisis and promote clean energy. And the national media will undoubtedly use this loss to suggest that climate and clean energy legislation lacks the momentum to pass this year.

We're too close to a comprehensive clean energy bill to get derailed by big oil or their allies in Congress.

Please add your voice now. Sign the urgent petition asking your Senator to protect the Clean Air Act.

Thanks,

Dave Boundy
Campaign Manager
The Climate Protection Action Fund's Repower America campaign

P.S. As if her support for the Dirty Air Act isn't enough, Senator Murkowski also just single-handedly delayed the consideration of a Senate bill that would have raised the liability cap for oil companies during offshore oil spills2 -- trying to make sure that the oil industry doesn't pay for contaminating our oceans and coastline, destroying our jobs and our environment. Our elected representatives should work for us, not for big oil. Tell your Senators to vote against Senator Murkowski's Dirty Air Act.



[1] Juliet Eilperin, "Murkowski and her lobbyist allies," The Washington Post, January 11, 2010. http://views.washingtonpost.com/climate-change/post-carbon/2010/01/murkowski_and_her_lobbyist_allies.html

[2] Richard Simon and Margot Roosevelt, "Democrats' effort to increase oil spill liability stalls," Los Angeles Times, May 14, 2010. http://articles.latimes.com/2010/may/14/nation/la-na-oil-spill-new-20100514



info provided by: Scott's Contracting GREEN BUILDER, St Louis "Renewable Energy" Missouri.

Solar Shingles

Shingle Power. Dow’s Solar Solutions division has introduced a photovoltaic roofing shingle that can be installed alongside typical asphalt shingles. Powerhouse solar shingles are nailed directly to the roof deck and electrically connected to each other with wireless plugs that require no electrical expertise from the roofer. This means they can be installed in common roof systems and retrofitted to existing shingle roofs. The company declined to provide pricing.

Scott's Contracting GREEN BUILDER, St Louis "Renewable Energy" Missouri.http://www.stlouisrenewableenergy.com, contact scotty@stlouisrenewableenergy.com for additional information

Scotts Contracting Green Build Labor Coupons

Green Build Coupon

Scott's Contracting GREEN BUILDER, St Louis "Renewable Energy" Missouri.http://www.stlouisrenewableenergy.com, contact scotty@stlouisrenewableenergy.com for additional information

Andalay Solar Webinars

Andalay Solar Webinars Join one of our LIVE Solar Webinars and learn about: - Specifics about the industry's first fully-integrated, plug & play AC solar power system - What makes Andalay AC unique from ordinary solar power systems - How Andalay AC can transform your solar installation business - * 5 - 25% better performance than ordinary DC panels * Built in microinverter delivers greater production in low light conditions on a per module basis * Latest generation monocrystalline cell technology * Output tolerance of just 3% means the promised power is delivered * Lighter weight and less space between panels so more can fit on a roof * Lower electrical resistance losses due to shorter wire lengths Scott's Contracting, GREEN BUILDER, St Louis "Renewable Energy" Missouri.http://www.stlouisrenewableenergy.com for Andalay Solar Information, email: scotty@stlouisrenewableenergy.com for additional information

Executive Report: The Executive's Guide to Global Climate Change

Executive Report:
The Executive's Guide to Global Climate Change

Global Climate Change is a growing concern as organizations adjust to ever-changing disclosure mandates, while trying to gain a competitive advantage through implementation of climate strategies to reduce GHG emissions. Towards this end, many organizations are trying to forge ahead utilizing manual processes and disparate legacy systems that only provide limited support for assessment of current conditions and hinder the development of forward looking business strategies.

In today's carbon-constrained environment, companies need information management solutions that generate accurate, verifiable data to meet the demands of regional, national and international standards, directives and regulations, as well as requests for Corporate Social Responsibility reporting for investors and community stakeholders.

Read this paper to learn why a robust information management strategy is needed to support your organization’s overall climate strategy and GHG inventory management plan. Executives now play a vital role in implementing corporate climate strategies, and their role will only become more important as information challenges escalate with supply chain and product lifecycle reporting initiatives that may soon impact your business – and the bottom line.

The Authors

* Jeff Ladner, IHS Director of Global Climate Change Solutions Practices
* Dorney Douglass, Vice President, EH&S Solutions Practices for IHS


Scott's Contracting GREEN BUILDER, St Louis "Renewable Energy" Missouri.http://www.stlouisrenewableenergy.com, contact scotty@stlouisrenewableenergy.com for additional information

Warning: 5 Biggest Home Repair Rip-offs

* by Reader's Digest Magazine, on Wed May 5, 2010 12:49pm PDT Repair Scams Are On the Rise When Ron Harrison was buying his house outside Atlanta, the professor of entomology at Mercer University wanted to inspect it for termites himself. With the help of two knowledgeable colleagues, he gave the home a clean bill of health. At the closing, though, Harrison got a surprise. The house had recently been treated for termites. But he could tell that it never had termites. The seller had been ripped off for more than $1,000 -- by a pest control firm that had both inspected and treated the house. Home repair rip-offs are on the rise, up 60 percent over the past five years, according to the Council of Better Business Bureaus. And the cons could cost you hundreds, if not thousands, of dollars. Here's how today's five biggest scams work, and what you can do to protect yourself. 1. Leaky Roof Wrangling The Rip-Off Water is coming through your roof. Or is it? A con artist will say water is seeping through the shingles and you need to tear off all the old layers and build a new roof, a job that typically costs $5,000 or more. The Reality Most of the time, roof leaks occur because the sealing around vent pipes has failed, the metal flashing on the chimney has deteriorated or the connections between roof sections have eroded. Replacing the sealing or flashing, simply and cheaply, will often solve the problem. Normally, an asphalt shingle roof lasts 15 to 20 years. You need to replace the roof if you see curling or missing shingles or a large amount of granular material from the shingles collecting in gutters. Don't get talked into having the bad roof torn off, at a potential 50 percent increase in costs, unless your building code demands it. Many towns will allow a second or even third asphalt roof to be installed if the home's framing can support the extra weight. And beware a roofer who says you need an entirely new deck, the wood base beneath the shingles. That will cost thousands of dollars more. In fact, a completely new deck is needed only one in 1,000 times. Usually only a portion of a deck needs to be replaced, but only if it's rotted. Scotts Contracting Offers Green and Eco Friendly Roofing Options 2. Basement Boondoggle The Rip-Off If your basement is chronically wet, unscrupulous contractors might tell you they need to dig out your entire foundation and waterproof it, for anywhere from $5,000 to $15,000. More often, though, the solution is simple and costs very little. The Reality Many basement leaks are caused by overflow from clogged gutters, misrouted downspouts, unsloped land around the house or even improperly aimed lawn sprinklers. "Think of your masonry foundation as a rigid sponge," explains waterproofing expert Richard Barako. If the water volume is above normal, water will wick through the cinder blocks. So before calling in professional help, try to reduce the moisture along the foundation by cleaning gutters, rerouting downspouts, repositioning sprinklers, or packing fresh soil six inches high against the foundation and sloping it back to level within about three feet. Damp walls may be caused by high humidity. To test, attach a piece of aluminum foil to the foundation wall; if moisture shows up on the patch in a day or two, it's just condensation. Start shopping for a dehumidifier. If water is still seeping in, repair any cracks with hydraulic cement, available at home stores, and apply a quality waterproof paint such as Latex Base Drylok Masonry Waterproofer. As a last resort, consider hiring a professional engineer, whose impartial advice would be worth the expense. Home inspectors are less expensive, but be sure they're certified by the American Society of Home Inspectors. 3. Termite Trap The Rip-Off Myths about termites abound. In a recent survey by the University of Kentucky, 60 percent of people thought termites could take a house down in six months or less. Nothing could be further from the truth, yet con artists use this fear to pressure homeowners into quickly signing on the dotted line for unnecessary or shoddy work that could cost up to $3,000. The Reality By arming yourself with a few facts, you'll be able to ask informed questions and avoid a scam. The most common termite in the United States is the subterranean, of which there are two main kinds: workers and swarmers, or winged termites. The workers hollow out the wood, while swarmers mate and create new colonies. Termites live underground and burrow through soil until they find wood or woodlike products, and water. To get into your house, they'll often build moist, earthen tunnels across foundations to your home's lower frames, a clear sign of infestation. Wood that's been damaged by termites is hollowed out along the grain, with bits of dried mud or soil lining the feeding galleries. Be wary of exterminators showing you termites on wood piles or fences unconnected to your house: This may be a scam. You have a problem only if there's evidence of termites inside the house or close to the foundation. Bugs flying in the home during the spring are another sign of infestation. These may be flying ants, however. Termites have a full waist, straight antennae and wings of equal length; ants have elbowed antennae, pinched waists and forewings longer than hindwings. There are more than 17,000 pest control companies in the United States, but bigger doesn't always mean better. You want a firm with good recommendations, lots of experience and a fair price. Question the company carefully and ask that it send an experienced technician, says Michael Potter, a professor of entomology at the University of Kentucky. And if an exterminator claims you have termites, he should show you the evidence. Some companies charge thousands for a typical job that could be done for less than $1,000, so take notes on the exact kind of treatment and compare apples and apples when getting estimates. See at least two or three companies before hiring one. And don't skip the guarantee. Pest control firms offer two types: "re-treatment," meaning the company will re-treat any area where termites show up again, and "repair," meaning it'll fix any damage caused by the pests. Such agreements tend to be complex and may be limited in coverage; read carefully before you sign. In either case, buy the guarantee that lasts at least five years. The relatively small annual fee (usually 10 percent of the original price) is well worth it. Even if the initial treatment was successful, termites could still be back within a year. 4. Chimney Sweep Swindle The Rip-Off In a classic bait and switch scam, a chimney sweep calls from a "boiler room" or comes to your door telling you he's just fixed a neighbor's chimney and is offering an inspection for the low price of $39.95. Once inside the chimney, he may claim to find problems, saying you need a new liner, for instance. Suddenly that $39.95 price tag rises thousands of dollars. The Reality There's no ques-tion fireplace chimneys can be hazardous. An oily, blackish substance called creosote accumulates inside the chimney and may catch fire if it's more than a quarter-inch thick. Occasionally, but not as often as chimney sweeps would have you believe, a blocked chimney can route carbon monoxide into your house. Experts recommend an annual inspection to check for creosote buildup and the structural soundness of the chimney. This usually costs $100 to $250 (not that ridiculous $39.95), and if cleaning is required, an additional $100 to $150. Hire only certified chimney sweeps who've been taught and tested by the Chimney Safety Institute of America. Also, watch the technician as he makes his inspection. Lately, sweeps are using video cameras fed down the flue, so ask to see the video and have the technician explain it as you watch. If he balks, he's scamming you. Chimneys for oil and gas burners are far less a concern. An oil-heat system that's serviced every year before winter hardly ever causes problems, says Kevin Rooney, CEO of the Oil Heat Institute of Long Island. But before you look for a professional chimney sweep, call your local fire department; some conduct inspections for free. 5. Mold Mayhem The Rip-Off Mold is making a comeback -- not in your home, necessarily, but with con artists, especially since Hurricane Katrina. Playing up fears about disease from mold, particularly over the Internet, they try to convince you to run $300 to $600 tests to identify your mold. Then they recommend a remediation company for removing the mold -- a firm they're in cahoots with. The Reality What you need to know about mold is simple: Healthy people usually have nothing to worry about. "If you're immunosuppressed or have allergies or asthma, it can be problematic," says David B. Callahan, MD, medical epidemiologist at the Centers for Disease Control and Prevention (CDC). "Other than that, mold isn't dangerous." The CDC doesn't even recommend testing mold, because if it's a problem to the occupants, it should be removed no matter what kind it is. And you don't need a remediation company for small areas. Just clean nonporous surfaces with soap and water, followed by a solution of one cup bleach mixed with one gallon water. To control future growth, eliminate excess moisture by keeping humidity levels between 40 and 60 percent. Promptly fix leaky roofs, windows and pipes, and ventilate shower, laundry and cooking areas. The CDC (www.cdc.gov) and Environmental Protection Agency (www.epa.gov) have plenty of good information on their sites -- for free. Information provided by: Scotty,Scott's Contracting GREEN BUILDER, St Louis "Renewable Energy" Missouri.http://www.stlouisrenewableenergy.com, contact scotty@stlouisrenewableenergy.com for additional information or to schedule a Free Estimate