Virginia Doubles Down, and the Money Keeps Following

Ray: Welcome to Community Solar News!

Della: Ray, three stories today and I already know how this is going to go.

Ray: Go ahead.

Della: First one's in Illinois.

Ray: It is.

Della: We are never renaming this show, are we.

Ray: Give it another month, Della.

Della: That's what you said last time. Fine, what else is on deck?

Ray: After Illinois we head to Virginia, where the legislature just handed the shared solar program a lot more room to grow. Then we close with a financing story that's honestly kind of enormous. Dimension Energy just picked up eight hundred fifty seven million dollars.

Della: Eight hundred fifty seven million. Okay, no heads-up today, we're saving all our air time for actual good news?

Ray: Nothing crossed the bar this week. Just building.

Della: Genuinely nice for once. Every episode doesn't need a warning label.

Ray: It does not. Three stories, three different ways money and policy showed up to help somebody actually build something. That's a good day on this beat.

Della: I'll take it. Let's start in Illinois.

Ray: Ballast Rock Asset Management just put development capital behind a seventy four and a half megawatt community solar portfolio in Illinois, for a company called Sol Source Power.

Della: Seventy four and a half, across how many projects?

Ray: Fourteen projects, all community solar, all in Illinois. It's an eighteen month loan out of Ballast Rock's Real Estate Private Credit Fund, earmarked for development costs and safe harbor expenses. The stuff that has to get paid before a project can even break ground.

Della: Safe harbor. The buy now, build later move on equipment, locking in eligibility before a deadline moves on you.

Ray: Exactly that. And Ballast Rock's managing director basically said the quiet part out loud. Smaller transactions, especially anything under ten million dollars, have a real capital gap right now. Developers can't always get a bank or a fund interested in a check that size.

Della: Which is exactly the size a lot of community solar projects are.

Ray: Right. So this is somebody actually filling that gap instead of just complaining about it.

Della: Good for Sol Source. Their chief investment officer said the money moves the portfolio toward construction and eventual commercialization. So, groundbreaking, eventually a subscriber base to fill.

Ray: Fourteen projects worth of subscriber capacity, eventually. Somebody's going to have a busy year.

Della: Filling that capacity is basically the whole ballgame on this beat, come to think of it, which is pretty close to what our sponsor does for a living. More on that later.

Ray: Later. But it's worth sitting with why a sub-ten-million check is even hard to place. Banks like scale, they like a portfolio that's already through interconnection, and fourteen community solar projects mid-development in one state doesn't always look like the kind of thing a big lender wants to underwrite alone.

Della: Right, the projects aren't the risk. The deal size is just awkward, too big for a local credit union, too small to be worth a bulge-bracket bank's time.

Ray: Exactly the gap. And private credit funds like Ballast Rock's exist to live in that gap on purpose.

Della: I'll bet we see more of this. Somebody finds a niche that specific, they don't stop at one loan.

Ray: Noted, we'll check back on whether Ballast Rock does a second Illinois deal. And if you're a developer sitting on a project this size wondering who even takes your call, apparently now you have an answer.

Della: For now, from Illinois financing to a Virginia mile marker. The shared solar program itself just got bigger.

Ray: Virginia's shared solar program started at two hundred megawatts a while back. That original allocation got fully awarded across fifty two projects, and it built up waitlists.

Della: Waitlists is my favorite word in this business. Demand outran supply.

Ray: Which is usually a good problem, except when you're the developer stuck on the waitlist and can't build. Governor Spanberger fixed that math on April fourteenth, signing legislation that expands the program from two hundred megawatts to five hundred twenty five, in Dominion Energy's territory.

Della: That's more than double.

Ray: More than double. There's a second bill for Appalachian Power's territory too. Fifty megawatts of new capacity by next July, another fifty by January of twenty twenty eight.

Della: So both utility territories in the state get more room. What about the low income piece, did they carve that out again, or is it first come first served this time?

Ray: They carved it out. The legislation includes a dedicated allocation for low income subscribers specifically.

Della: Good. That's the part that actually matters to me. A dedicated allocation means it doesn't quietly get squeezed out once the bigger players start subscribing capacity.

Ray: And for the numbers person in the room, CCSA cited a third party analysis projecting sixty four million dollars in net grid benefits within two years, and two point four billion over twenty five.

Della: Two point four billion. Over a full program life, sure, but still. Grid benefits are the argument that tends to move skeptical lawmakers, more than the subscriber savings pitch alone does.

Ray: It's the number that gets a bill signed. And on the subscriber side, still a real number too. Participants are seeing ten percent or more off their monthly bill, something like a hundred seventy five dollars a year.

Della: The bill sponsors were Senator Surovell and Delegate Sullivan, and CCSA's Mid-Atlantic director credited the governor with proving affordability and local clean energy aren't in tension.

Ray: I'll take a governor doing math over a governor doing vibes any day.

Della: Ray. Behave. But yes, more room for developers, a bigger dedicated slice for low income subscribers, and receipts on what it's worth to the grid. That's a good bill.

Ray: It is. And here's the part I keep coming back to. Fifty two projects filled the original two hundred megawatts and still had people waiting. That tells you the demand was never the problem in Virginia, it was always the ceiling.

Della: So raise the ceiling and see what happens.

Ray: Raise the ceiling and see what happens. I'll make a prediction, since apparently that's my job today. I think this new capacity block in Dominion territory doesn't last the way the last one did. Faster fill, given the waitlist that was already sitting there.

Della: I'll take the other side of that, just to keep it interesting. New rules, new paperwork, developers moving carefully the first few months. We'll actually know by next year, so, noted, we'll check back.

Ray: Noted. That's a good bill. Alright, from a state doubling its program to a company that just quietly became one of the better capitalized platforms on this whole beat.

Della: Dimension Energy. Go.

Ray: Eight hundred fifty seven million dollars in additional capital, across two pieces. First, they upsized their corporate credit facility by two hundred million, bringing that facility up to six hundred fifty million total.

Della: That's just their revolving corporate line. What's the rest?

Ray: The rest is a six hundred fifty seven million dollar construction to term debt and tax equity financing package, tied to twenty nine specific distributed solar projects.

Della: Twenty nine projects. Where?

Ray: Spread across Illinois, there it is again, New Jersey, New York, Pennsylvania, and Virginia. A hundred and forty nine megawatts combined.

Della: Told you we're not renaming the show.

Ray: Illinois just keeps showing up, what do you want me to do. Anyway, the lender list on this one is long. Nuveen Energy Infrastructure Credit, HPS Investment Partners, Advantage Capital, MUFG, First Citizens, ING Capital, National Bank of Canada, Fifth Third.

Della: Eight banks on one deal. That's basically the entire banking directory saying yes at once.

Ray: That's the read here. Eight institutions don't write checks on the same platform in the same week by accident.

Della: Underwriters talk to each other. If one credit committee gets comfortable, the next one moves faster.

Ray: That's exactly how a syndicate this size comes together this fast.

Della: What's the thesis, in plain terms?

Ray: Dimension already owns more than six hundred megawatts of distributed energy assets operating or under construction, and they're targeting a full gigawatt of operating assets by twenty twenty eight.

Della: So that eight fifty seven is landing on a platform that's already six hundred megawatts in and still building toward a gigawatt.

Ray: That's exactly it. Their CEO, Rafael Dobrzynski, said the new commitments reflect the strength of the platform. When eight lenders write checks at once, that's the market actually agreeing with him.

Della: I like a capital story with layers. Corporate line, project debt, tax equity, all moving at the same time toward the same gigawatt target.

Ray: And it's not one project, remember, it's twenty nine of them, in five states, all moving under one platform. That's the part that's actually hard to pull off. Anybody can finance one good project.

Della: Financing a pipeline is a different skill than financing a project. Fair. Worth checking back on come twenty twenty eight, see if that gigawatt number holds.

Ray: We will. I want to be the one who gets to say I told you so if they hit it early.

Della: Noted, for the record, on tape.

Ray: Illinois financing filled a gap for a smaller developer, Virginia made room to build, and Dimension just proved the capital markets believe in this sector at scale.

Della: Small checks, big checks, one state legislature, all pointed the same direction this week. I'll take three of these episodes in a row, honestly.

Ray: Don't jinx it, Della.

Della: Fair. I'll take it back.

Ray: Before we go, two things. First, our sponsor.

Della: This episode's brought to you by Our Power Co. You build the solar, they bring the community.

Ray: That's the whole pitch, honestly. Our Power Co. does community solar customer acquisition, filling subscriber capacity for projects like the ones we just talked about today. If you're a developer or operator sitting on capacity and you need people in the seats, reach out to Our Power Co.

Della: And if you're listening as an actual person who wants to subscribe and lower your own bill, that's a different door. Go to join community dot solar.

Ray: One more thing before you go. This show is made almost entirely with AI, and we're deliberate about which tools we use. Ones that cover their own energy and grid costs, and use water efficient cooling, instead of pushing that onto local households and small businesses. Felt like the least we could do on a show about energy.

Della: And every fact we said today is sourced and linked in the show notes, so you can go check our work.

Ray: For the day to day between episodes, by the way, we've got a free daily rundown called The Solar Docket. Docket filings, capacity block moves, program notices, and what they actually mean. It's over at community solar dot news.

Della: Find us on Spotify, Apple, Amazon, or watch the full episode on YouTube.

Ray: And head to community solar dot news for the newsletter.

Della: That's the community in community solar.