Five B-Corps. ban together for $35 million fund for residential solar development

A first-of-its-kind group of five certified B-Corporations has come together to create a $35 million tax equity fund that will make the benefits of solar power available to thousands of U.S. households. Ld by Patagonia, a high-end American outdoor clothing company based in Ventura, Calif., and Kina’ole Capital Partners, LLC, the new fund uses state and federal tax credits to direct Patagonia’s tax dollars for residential development of affordable, efficient Sungevity solar energy systems.

SungevityThe new fund builds off a similar, successful endeavor between Patagonia and Kina’ole that was created to purchase 1,000 rooftop solar systems in Hawaii in 2014. Now reaching the mainland United States, here are the five B-Corps. making it happen: Patagonia as the tax equity investor; Kina’ole as the fund manager; New Resource Bank and Beneficial State Bank as lenders; and Sungevity, Inc., as the project developer. B Corps are for-profit companies certified by the nonprofit B Lab that meet rigorous standards of social and environmental performance, accountability, and transparency.

“We’re doubling down on an investment strategy that brings great financial returns while supporting the clean energy economy,” said Patagonia CEO Rose Marcario. “B Corps know how to make money while creating broader benefits – but any company would be smart to leverage their tax dollars this way. I hope others take advantage of a great opportunity.”

RELATED: Report: U.S. solar market to grow 119 percent in 2016 

The U.S. solar market, which currently employs 209,000 workers, is expected to see aggressive growth over the next five years, making the sector a prime area for investment. Solar installations are projected to reach 25 GW of solar capacity, and the recent extension of the 30 percent federal solar investment tax credit (ITC) will foster $40 billion in incremental investment in solar between 2016 and 2020.

The fund will purchase more than 1,500 residential solar energy systems to be made available to homeowners in Arizona, California, Connecticut, Delaware, Maryland, Massachusetts, New Jersey and New York. Homeowners pay no up-front costs but sign power purchase agreements to buy solar energy for less than their utility’s rates (any surplus energy produced by the panels is sold back to the utility). Sungevity manages the contracts, installations and customer service.

Over a 20-year life span (the average for a solar installation), the rooftop systems installed through the fund are expected to produce 200 million kilowatt hours (kWh) of electricity.

“We’re excited to join with Patagonia to share our tax equity investment blueprint with other companies interested in making a successful return by supporting clean energy,” said Blair Herbert, Principal of Kina’ole. “Sungevity quickly emerged as the natural partner given its strong customer experience and like-minded management team, and we’re excited to see our fund result in more residential solar over the coming years,” added Kina’ole principal Andrew Yani.

The previous fund established by Patagonia and Kina’ole in 2014, totaling $27 million, was developed to purchase 1,000 solar systems in Hawaii. The program has already successfully helped many homeowners and individual condominium residents enjoy electricity savings from clean renewable solar power.


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