With the finalizing of a $1.4 billion partial loan guarantee from the U.S. Department of Energy, Project Amp is ‘green-lighted’ to go. The solar generation project will be installed across about 750 commercial rooftops across 28 states, and the District of Columbia.
Project Amp. Photo courtesy of the U.S. Department of Energy’s loam programs office.
“The energy generated from those panels will contribute directly to the electrical grid, as opposed to powering the buildings where they are installed,” said the energy department.
Prologis – an owner, operator, and developer of industrial real estate – will provide the rooftops, and will also act as developer, construction manager and program sponsor, in addition to making an equity investment in the project.
U.S. Energy Secretary Steven Chu said this project “will help us meet the SunShot goal of achieving cost competitive solar power with other forms of energy by the end of this decade.”
The project is expected to produce an annual output of about 1 million megawatt-hours, with enough power to provide clean, renewable electrical energy for approximately 80,000 homes for a year, according to the energy department and affiliated experts.
NRG Energy – one of the nation’s largest electric companies and solar developers – is the lead investor for phase one of the installations, with financing through Bank of America Merrill Lynch, under the Financial Institution Partnership Program (FIPP).
Phase one of the project will involve the construction and installation of solar panels in Southern California, where the generated power will be sold to a local utility (Southern California Edison) under long-term approved power purchase agreements.
NRG Energy has committed to being the lead investor in the project for the next 18 months, with the right of first offer for the remainder of the project, providing development resources and expertise for installations.
This project “will nearly double the amount of grid-connected solar” power in the U.S. today, said Tom Doyle, president of the company’s subsidiary, NRG Solar.
BofA is acting as the sole financial and structuring advisor, as well as sole lender in the transaction, which is being executed under the FIPP. The total project size is expected at $2.6 billion.
The energy department will guarantee 80 percent of the $1.4 billion debt financing for the transaction, saying that the loan has “undergone many months of due diligence.”
The energy department said that part of its due diligences process for evaluating a project includes whether:
- the finances of the project make it commercially viable.
- the technical aspects of an application are feasible.
- the project can be built to scale.
- there is a market for the product.
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