Boston Community Capital and the Solar Energy Advantage: Let There Be Light

Abstract

Dick Jones had just received a voice mail from Jigar Shah at SunEdison, a solar energy services firm, informing him that his venture-financed firm would not be able to partner on the solar project they had been discussing the last few months—a plan to bring the benefits of clean, renewable energy to low-income families in Boston. A third-party solar power purchase agreement would have allowed low-income housing developments to lock in their electricity rates far into the future, making budgeting and cash management much easier. Now Jones wondered how to go forward. Excerpt UVA-ENT-0175 Rev. Jan. 16, 2013 Boston Community Capital and the Solar Energy Advantage: Let there be light DeWitt (Dick) Jones, president of Managed Assets at Boston Community Capital (BCC), sighed heavily as he struggled to find adequate cell phone service outside his rented Cape Cod cottage. He had just received a voice mail from Jigar Shah at SunEdison, a solar energy services firm, informing Jones that his venture-financed firm would not be able to partner on the solar project they had been discussing the last few months—a plan to bring the benefits of clean, renewable energy to low-income families in Boston. A third-party solar power purchase agreement (PPA) would have allowed low-income housing developments to lock in their electricity rates far into the future, making budgeting and cash management much easier. Jones wondered how BCC would go forward. Installing solar panels required a certain level of expertise—particularly when one considered the retrofitting measures that might be necessary on older housing units. Any installation would also have to account for Boston's particular climate: Winter meant several months of limited sunlight in addition to harsh nor'easters that could damage equipment. Though hard to imagine in the late August sunshine, heavy snowfall would block sunlight from reaching the panels and would require timely and potentially labor-intensive removal. Furthermore, BCC would have to raise tax equity that would have been covered by SunEdison's investors. BCC's expertise, networks, and reputation were well developed among Boston's financial and political community, but the firm had precious little experience with solar energy projects and few contacts in the tax equity world, at least until that point. Simply put, BCC was not a solar installation and construction firm. They were affordable housing and community development professionals. . . .