California, United States — Borrego Solar Systems Inc. has secured financing from U.S. Bank and East West Bank to finance an approximately US $20 million solar energy project for the San Diego Community College District (SDCCD)—the first to be financed through Borrego Solar’s power purchase agreement (PPA).
The 2.8-megawatt (MW) system will consist of nine solar arrays to be installed at six locations across the SDCCD campuses. The majority of the project cost will be funded through financial commitments from East West Bank and U.S. Bank, and the remainder will be contributed by the PPA fund launched in 2009 by Walsin Lihwa, a current investor in Borrego Solar.
“Borrego Solar demonstrated that it is an ideal investment partner by presenting us with the shovel-ready SDCCD project, a signed PPA contract and the support of the Walsin Lihwa PPA fund along with U.S. Bank’s equity investment. With this infrastructure in place, we were able to quickly agree to contract terms and closing. We look forward to working with Borrego and Walsin Lihwa on this and future projects as East West Bank continues to pursue its Green Initiative,” said K.Y. Cheng, Executive Vice President, East West Bank.
By financing through Borrego Solar’s PPA, the SDCCD and other customers will be able to reap the benefits of solar energy without incurring upfront capital costs or operational expenses. Under the terms of the 20-year agreement with the SDCCD, Borrego Solar will build, operate and maintain the solar systems, selling the energy to the SDCCD at rates that are approximately 18 percent less than the rates charged by San Diego Gas & Electric—resulting in a savings of more than $110,000 annually.
“Financing a solar energy system using a PPA has emerged as an extremely appealing option for customers. We have seen a tremendous uptick in demand since introducing our PPA model, especially as expiring government grant programs and shrinking state rebates have stalled a number of projects,” said Mike Hall, CEO of Borrego Solar. “The investments from U.S. Bank and East West Bank for our project with the SDCCD validate the long-term viability of Borrego’s PPA offering and illustrate our value proposition as a ‘one stop shop’ for solar design, construction, maintenance and now financing. We look forward to working with them to develop our portfolio which currently consists of more than 50 MW of projects.”