Betting Long: Buybacks, Lock-Ins, and a First-of-Its-Kind Tax Equity Deal

Ray: Welcome to Community Solar News!

Ray: Della, I need you to brace yourself, because there is another agrivoltaics story on the rundown today and it does not involve sheep.

Della: Okay, first of all, rude. Second of all, what is it, because I know you've already got a favorite.

Ray: SunShare Community Solar just cut the ribbon on Juniper Sol, five megawatts down in Eldorado, New Mexico, just outside Santa Fe. Came online back in July, ribbon-cutting was yesterday.

Della: And the agrivoltaic angle is what, exactly?

Ray: Native groundcover under the array instead of gravel or turf. Globe mallow, sagebrush, and they're planning a pollinator garden on top of it. The equipment came out of a manufacturer up in Rogers, Minnesota, if you're keeping a domestic-content scorecard.

Della: I am always keeping a domestic-content scorecard, you know this about me. And no sheep, but I'll allow the pollinators. SunShare says they're full up on subscribers for this one, which, in this market, is worth saying out loud.

Ray: It's a small project, five megawatts isn't going to move any headline, but a fully subscribed roster on delivery day is the kind of quiet win that doesn't always get a press release.

Della: A five megawatt project filling its subscriber roster before the ribbon-cutting tells you more about market demand than the megawatt number does. And it lands right as New Mexico cleans up its own back office. The PRC just approved consolidated billing, so subscribers get one bill instead of a solar credit statement showing up separately from the utility bill.

Ray: That's the unglamorous fix that actually moves the needle on churn, by the way. Nobody cancels a subscription over a great one-page bill. People cancel over confusion.

Della: Exactly, and confusion is what two separate mailers guarantee. Zoom out on the whole state program, though, and it's sixteen of forty-seven approved first-round projects actually operating, with three hundred megawatts of second-round capacity approved on top of that.

Ray: Which is exactly the gap I flagged back in July, the space between what gets approved on paper and what actually gets energized. Sixteen of forty-seven online is real movement, but it's still less than half.

Della: I'm keeping the tally. If you're a developer sitting on one of those thirty-one unbuilt approvals, Juniper Sol is proof the market on the other side is there. The subscribers showed up. The question is whether the projects catch up.

Ray: Duly noted. Next up, and this one's a little more counterintuitive. PowerBank just bought back two of its own projects.

Della: Bought back? From who?

Ray: Through their subsidiary Abundant Solar Power, they reacquired Highway 28 and Gainesville, two New York projects, six point nine megawatts and seven megawatts, thirteen point nine combined. Construction value on the pair is around thirty two and a half million, with roughly thirteen million in expected federal tax credit value.

Della: So why take a project back onto your own balance sheet instead of just developing it forward and handing it off like a lot of shops do?

Ray: Their CEO framed it as a shift toward asset ownership, building recurring revenue instead of collecting a one-time development fee and walking away. It's a different business model bet, own the megawatts, not just build them.

Della: That only works if the projects are actually far enough along to be worth owning. Where are these two sitting?

Ray: Highway 28's construction-ready for the third quarter this year, interconnection and the major permits are already secured. Gainesville's a little further out, lined up for 2027, interconnection secured but still working through permitting. Both come out the other side as community solar.

Della: So they're picking up two projects that were already de-risked on the interconnection side, not taking a flier on raw land. That's the part that makes the ownership bet make sense to me.

Ray: Thirteen million in expected tax credit value against thirty two and a half million in construction cost, roughly speaking, and that's before you count whatever the subscriber bill credits are worth over the life of the project.

Della: Which is the actual return they're betting on by holding instead of flipping. You don't get that revenue if you sell the project the day it's shovel-ready.

Ray: PowerBank keeps popping up in New York for us. And with a pipeline they describe as over a gigawatt, this probably isn't the last time we say their name this year.

Della: Wouldn't bet against it either.

Ray: Okay, quick heads-up before we move on, and it's a Rhode Island one, which doesn't come across our desk often.

Della: Go ahead, what's the utility trying to change?

Ray: Rhode Island Energy filed a proposal with regulators on August 14th to cut the cap on ground-mounted remote net metering from two hundred seventy five megawatts down to one seventy five.

Della: That's a real cut, not a rounding error. What's the trade for giving that up?

Ray: A longer runway and a new option. The build deadline for projects to be operating or under construction moves out from mid-2030 to the end of 2032. And there's a brand new fixed credit on the table, nineteen cents a kilowatt hour, stepping up close to three percent a year.

Della: Nineteen cents sounds generous on its face. What's the catch?

Ray: It's a one-time, irrevocable election. You take it, you're locked in for twenty five years, escalator and all, starting January of 2028.

Della: Twenty five years is a long time to be locked into a rate you picked on day one. Who actually qualifies for that option?

Ray: Public entities, schools, hospitals, nonprofits, multi-municipal collaboratives, some commercial and industrial customers, and community remote systems specifically. Rhode Island Energy says something like a hundred and fifteen existing systems could qualify.

Della: There's also a small-system piece in here, right? Something for the little guys?

Ray: Right, arrays twenty five kilowatts or smaller get credited for all production above a hundred percent of consumption, priced off ISO New England's wholesale rate, calculated monthly.

Della: So if you're one of those hundred and fifteen systems, the homework is simple: run the math on locking in that fixed rate for a quarter century before the comment period closes, because there's no second bite at that election once it's made.

Ray: Docket 26-30-EL, proposed effective date is September 13th. If you've got a remote or community remote system in that territory, that window is not far off.

Della: And worth remembering that every ratepayer in the territory is on the hook for this either way, since net metering credits get recovered through a distribution surcharge across the board. Not a doom story, just homework with a deadline.

Ray: And it's a small state, but the shape of the trade, a smaller cap in exchange for more time and a locked-in rate option, is exactly the kind of tradeoff other states tend to copy once one utility puts it on paper.

Della: Worth watching whether Rhode Island's the test case or just the first one we happen to notice.

Ray: Right. Okay, Della, saved the best paperwork for last.

Della: You say that like paperwork is exciting, and then you make me agree with you every single time.

Ray: Foss & Company just closed roughly a hundred and fifty million dollars in tax equity for a joint venture between Summit Ridge Energy and Apollo Global Management, and it's an Illinois portfolio.

Della: There it is. Illinois again.

Ray: I'm not even going to defend it anymore, the state just keeps showing up. But here's the actual news inside the news: this is one of the first announced deals structured under the new Section 48E Clean Electricity Investment Tax Credit framework.

Della: First of its kind matters more than the dollar figure, honestly. Everyone doing tax equity right now is watching to see how 48E actually behaves in a real transaction, and this is one of the first proof points on the board.

Ray: Right, 48E's technology-neutral structure changes how a deal gets underwritten from the ground up compared to the old credit. And now there's the FEOC piece on top of that, the foreign entity of concern rules, a whole new layer of diligence nobody had to run two years ago.

Della: So the fact that Foss and Summit Ridge got through that on their eighth deal together, not their first, tells you the relationship did a lot of the heavy lifting on a framework that's still brand new to everybody. That's not a small thing to pull off on deal one.

Ray: More than half the projects are lined up for Illinois' Adjustable Block Program, anchored by fifteen and twenty year renewable energy credit streams with commercial subscribers. That's the revenue backbone underneath the whole financing.

Della: And the portfolio's stacking Domestic Content, Energy Community, and Low-Income adders on top of the base credit.

Ray: That adder stack is the part I'd copy if I were another developer reading this. It's a template for squeezing more value out of the same megawatts under the new rules, not just a bigger check.

Della: This is deal number eight between Foss and Summit Ridge, isn't it?

Ray: It is. Their CIO said navigating the FEOC requirements under 48E on deal eight is exactly what a relationship like that is built for.

Della: Eight deals deep, they've earned the shorthand at this point. That kind of repeat relationship is its own kind of proof that the underlying model works.

Ray: And underneath all of it, filling that capacity with real subscribers, commercial or residential, is still the whole ballgame. Which, funny enough, is literally what our sponsor does.

Della: Nice segue. Speaking of, let's talk about them properly.

Ray: This episode is brought to you by Our Power Co. You build the solar, we bring the community.

Della: That's the whole pitch, and it's a good one. Our Power Co. does community solar customer acquisition, meaning they fill subscriber capacity for projects like the ones we just talked about. If you're a developer or operator sitting on megawatts that need subscribers, that's the conversation to have.

Ray: And if you're listening as an actual homeowner or renter who just wants to subscribe and lower your own bill, that's a different front door. Go to join community dot solar to sign up.

Della: One more thing about how this show gets made. It's produced almost entirely with AI, and we're picky about which tools we use for that. We pick ones from companies that cover their own energy and grid costs and use water-efficient cooling, instead of quietly pushing that cost onto somebody's local utility bill.

Ray: On a show about who pays for power, that felt like the least we could do. And every fact you heard today is sourced and linked in the show notes.

Della: By the way, if you want the day-to-day between episodes, we've got a free daily rundown called The Solar Docket, docket filings, capacity block changes, program notices, with a quick read on what each one actually means. It's at community solar dot news.

Ray: Find us on Spotify, Apple, Amazon, wherever you get your shows, and now on YouTube if you'd rather watch than listen. Head to community solar dot news for the newsletter.

Della: That's the community in community solar.