Written by The Business Journal Staff
Pacific Ethanol is purchasing and installing a new 5 megawatt (MW) solar photovoltaic (PV) power system at its Madera biorefinery and $10 million of the project cost is being financed by CleanFund, the leading provider of long-term financing for energy efficiency, renewable energy, water conservation and seismic improvements specifically for commercial, industrial, multifamily and other non-residential properties across the U.S.
CleanFund, which made the announcement this week, provides capital for projects using Property Assessed Clean Energy (PACE), a financing framework adopted in 33 states and the District of Columbia that allows property owners to repay investments for building upgrades and new construction on their property tax bills.
The Pacific Ethanol financing is the largest commercial PACE transaction in the U.S. to date. The improvement also represents the largest solar PV system (based on power generating capacity) to be funded through a PACE program.
“The integration of solar power at our Madera plant underscores our commitment to optimize our plant assets, lower the carbon intensity of our ethanol and reduce our operating costs,” said Neil Koehler, president and CEO of Pacific Ethanol. “We are proud to build the first ever commercial solar electricity system at a U.S. ethanol plant. Pending the completion of interconnection agreements with our local utility, Pacific Gas & Electric Co., we expect to begin operating the solar PV system at full capacity in early 2018.”
The solar plant will be located adjacent to the Pacific Ethanol industrial facility on 137 acres in Madera County. The 5 MW solar PV system is expected to reduce the Madera facility’s annual utility costs by over $1 million and will be cash flow positive from year one. The system also qualifies for the Energy Investment Tax Credit, further improving its attractive investment profile.
The system will be designed and installed by Borrego Solar, ranked as one of the top providers of commercial distributed generation solar energy systems in the U.S.
“Pacific Ethanol represents the new generation of fuel companies — low carbon fuel production powered by zero carbon energy,” said Mike Hall, CEO of Borrego Solar. “This will be one of the largest single-site net metered projects in PG&E territory. Historically these types of projects were limited to a single megawatt, but given the recent CPUC NEM 2.0 ruling, large energy users are now able to go above that threshold and offset a significantly larger portion of their overall usage. In addition, by financing this project through PACE, Pacific Ethanol is able to retain full ownership of the system from day one and capture the tax incentives afforded to solar system owners.”