Christopher Lord, Managing Director of CapIron, Inc. and an instructor with HeatSpring, recently interviewed Andre Zaffuto, a lending officer focused on solar and other renewable energy opportunities for Bridge Bank. Lord talked with Zaffuto about bank lending in today’s solar climate.
- Leverage on solar projects can greatly enhance the ability of sponsors to stretch their capital and do more with finite resources.
- It’s a good year for solar lending – rates are expected to stay low.
- There’s a wider acceptance of solar as an asset class and an understanding of its risk (all based on years of operating data).
- Senate Democrats are already trying to pass an ITC extension, but the outcome is far from clear. In the absence of such an extension now or before the end of 2016, Zaffuto speculates that lenders will try to fill the void in the capital stack with an increase in lending, but that would also require lenders to take on more risk.
- Factors that make a solar project attractive: major contracts executed or in very late stage drafting, including: PPA and or SREC contracts, interconnection agreements, EPC contracts and, of course, a ground lease. Permits should also be in place or ready to issue. A strong balance sheet. An investment grade rating is always a big plus but not necessarily a requirement.
- Sponsors should look at a lender’s execution ability, including their speed to funding, and their experience/technical knowledge of solar. These items all have a direct impact on the due diligence process and closing or transaction costs.
To learn more, listen to the podcast:
About Andre Zaffuto
Andre Zaffuto has been with Bridge Bank since 2014, after pursuing opportunities in energy efficiency and commercialization of green technologies. His career included an MBA from UC Davis (where he was an energy efficiency fellow), and stints with Solar Power Partners and NRG. As a Vice President and Relationship Manager with Bridge Bank, he focuses on C&I and Utility scale solar lending.
About Chris Lord
Christopher J. Lord is a lawyer with deep banking experience, and the Managing Director of CapIron, Inc., a firm he founded in late 2011, to provide advisory and consulting services to customers, owners, developers, utilities, suppliers, installers and distributors covering the full range of value-add in renewable energy and energy efficiency. CapIron has provided consulting and modeling services for waste-to-energy projects, advisory services to a large-scale distributed generation solar project, consulting and advisory services in the solar thermal industry and early-stage development of a startup wind energy company.
Chris Lord teaches the Financial Modeling for Solar PV Projects course from Heatspring and partner Renewable Energy World. The course is a unique and intensive hands-on course on modeling distributed generation solar PV projects. Click Here to learn more.