NYS Green Bank issues RFI relating to back leverage financing of certain C&I PV solar projects in NYS



June 27, 2016

Project Finance Solar Alert

Author(s): Ellen S. Friedman

The NY Green Bank, a $1 billion New York State-sponsored specialized financial entity, is ramping up its efforts to support more solar development in New York State. On June 27, 2016, it invited public comment to its Draft Request For Proposals (Draft RFP) (see attached) targeting developers of PV solar projects in NYS that:

  1. offer remote net metering credits to commercial, industrial and other institutional power users under NY Public Service Law 66-j;
  2. use “Tier 1” solar panels, racking and inverter;
  3. are in the advanced stage of development as more specifically defined in the Draft RFP; and
  4. are 500kW to 2MW in size, ground mounted, canopy mounted and non-residential rooftop PV solar projects.

Terms of the Draft RFP contemplate project level construction loans and/or back-leveraged term loans for both single project and portfolios and are structured to work in concert with tax equity financing. The Draft RFP sets forth the NY Green Bank’s underwriting approach to Remote Net Metering Credit counterparties, which includes a basic set of screens for creditworthiness, but is largely based upon the ability of the developer to sell net metering credits to another C&I buyer if a current counterparty no longer meets its payment or contractual obligations. The Draft RFP cites critical elements of this aspect of the underwriting methodology as (i) the developer’s ability to contract with a new counterparty if necessary and (ii) likely future value to a new counterparty of the net metering credits to be generated by the project. Responses to the RFI are due by 5:00 p.m. on August 5, 2016. For additional information please link to http://greenbank.ny.gov/Working-with-Us/Request-for-Information.

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