WEST PALM BEACH, Fla., Oct. 22, 2013 /PRNewswire/ -- As part of the U.S. Department of Energy's SunShot Initiative that seeks to lower the cost of solar power to compete with grid power, Demeter Power has been awarded a $500,000 SunShot Incubator award to demonstrate a new way for commercial building owners to finance valuable solar improvements on their properties.
"Solar for homeowners, governments and utilities has scaled tremendously thanks to ever-lower costs and the proliferation of financing options like the solar lease -- but commercial customers, particularly owners of small and medium commercial buildings, have been largely left out of this revolution because of the difficulties in providing a corporate guarantee to secure this financing," said Michael Wallander, Demeter Power Group founder and President. "Our financing model overcomes this obstacle."
Demeter's approach builds on an innovative, local-government-sponsored program called PACE, or "property-assessed clean energy," which Harvard Business Review called a Breakthrough Idea in 2010. PACE secures repayment for long-term financing as an assessment on the property tax bill.
"PACE has been used to secure loans for property owners; we will demonstrate that it can be used to finance commercial solar leases and power purchase agreements," said Wallander. "This will enable more property owners to access solar more affordably."
There are 4.6 million small commercial buildings that together consume over 40 percent of energy used within the commercial sector. While over two-thirds of residential solar installations are financed with a solar lease or PPA, less than one-third of commercial installations are funded in this way.
Demeter's SunShot award will fund development of an online portal for solar developers to use to generate term sheets to offer financing to commercial property owners. Developers can register with Demeter for eligibility to offer Demeter's financing to property owners – or property owners may apply directly to Demeter for financing.
About The SunShot Initiative
The U.S. Department of Energy (DOE) SunShot Initiative is a collaborative national effort that aggressively drives innovation to make solar energy fully cost-competitive with traditional energy sources before the end of the decade. Through SunShot, DOE supports efforts by private companies, universities and national laboratories. Learn more: http://www.energy.gov/sunshot.
About Demeter Power Group
Demeter Power provides the first uniform, scalable financing for commercially distributed clean energy. The company offers contractors, developers and commercial property owners access to zero-down financing for solar integrated with commercial buildings through its PACE Lease® and PACE Shared Savings™ financial products.
About Demeter's Mission and Grand Vision:
"The day is near when centralized power plants are as obsolete as mainframe computers and landline telephones, when you can charge your car battery under a solar-powered car port by day and use it to power your house in the evening. Demeter intends to help lead this transition to a more open, democratized, decentralized and distributed network – a 'de-metered' ecosystem – of dynamic energy producers and consumers."
How PACE3P® (i.e., third-party ownership PACE) improves credit:
"Demeter's PACE3P® financing can enhance solar customer credit by securing the financing with a senior property lien and collecting the payment on the property tax bill. This enables more flexible, long-term financing that can create positive cash flow from day one."
How PACE3P® Can Change The Way Commercial Customers Buy And Use Energy:
"By securing long-term future purchases for solar energy -- which has no fuel cost – property owners and tenants can effectively hedge their future energy costs against further utility increases."
How PACE3P® solves the landlord-tenant split incentive:
"PACE3P® makes it easier than ever to share costs and benefits between landlord and tenant – this is because benefits and costs can be more easily flowed through in most lease structures."
How PACE3P® helps contractors build business:
"Demeter works with reputable solar contractors and developers to provide scalable PACE3P® financing to property owners. Our online platform allows contractors to register projects for finance offers, making the process more efficient and allowing contractors to focus on selling – not on haggling for guarantees to support financing for the project."
How PACE3P® Can Integrate Battery Storage:
"Demeter plans on providing PACE3P® financing to distributed generation systems that enhance the solar value proposition with intelligent energy storage solutions. Storage can become a valuable asset to a solar installation, further lowering the cost of energy for building owners."
Why Is Third-Party Ownership Financing Important?
"Residential and utility solar sectors have grown primarily because of innovative, scalable third-party owned solar financing. The largest energy sector by usage – commercial and industrial – is lagging due largely to the limited availability of third-party financing. Demeter's PACE3P® financing makes third-party owned solar a reality for this large market segment."
How PACE3P® Enables Securitization:
"Distributed energy projects can provide revenue streams capable of being securitized in a variety of ways. Securitization enables a wider investment audience to benefit from these projects, in turn, translating a lower cost of capital to project developers – and a virtuous cycle that accelerates the distributed energy revolution."
- Nature & Environment