Let the Sun Shine In: How Churches and Colleges Can Save with Solar with Austin Carr and Jim Keeling

Transcript

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You know, it's really important we talk to our potential customers quite often.

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So you really need to explore a local first. And even maybe somewhat regional doesn't have to be just in Rockford. But you want to make sure you're talking to a company that's vertically integrated and a lot of cases are that has the people in place. So example for Greenlee talked about the wraparound service, because solar is complex, and making sure that expectations are set correctly.

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And that communication is open and flowing. These projects aren't something that happens in a couple days, or our use case not even a couple of weeks. It's a long term project. And there's lots of moving parts and just making sure that everybody knows where we're at. And if there are questions or concerns that you can get to the right person to ask those questions and get those status updates on a project.

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Are you speeding the energy transition? Here at the Clean Power Hour, our host, Tim Montague and John Weaver bring you the best in solar batteries and clean technologies every week? Want to go deeper into decarbonisation? We do two, we're here to help you understand and command the commercial, residential and utility, solar, wind and storage industries. So let's get to it.

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Together we can speed the energy transition

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Welcome to the Clean Power Hour live. I'm Tim Montague, your host today we bring you a special live webinar. Let the sun shine in how churches and colleges can save with solar, featuring Austin Carr, founder and president of Greenlink Energy Solutions. And Jim Keeling, a business attorney and partner at Hinshaw law, both based in Rockford Illinois. Today we're discussing the opportunities and challenges of behind the meter P V. For churches and universities in Northern Illinois, Austin and Jim will be sharing their insights from recent successful solar installations at our Savior Lutheran Church, and Rockford University, including navigating incentives, financing, financing options, and stakeholder engagement.

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Please check out all of our content at cleanpowerhour.com Give us a rating and a review on Apple or Spotify. And check out our YouTube channel. All of our content is available on YouTube as well. This event is being recorded and all registrants will receive a link to the final recording. Please put your questions in the q&a. And we'll make sure to get your questions answered during the course of the discussion or at the end.

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And please connect with me on LinkedIn. I love hearing from my listeners. I'm very easy to find. I'd like to introduce our speakers, and they will make a few introductory remarks about their experiences with solar.

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And then we'll work through a series of points about their experience with solar for facility owners. Austin Carr is the founder and president of greenlink energy solutions and a wonderful client of mine for the last six months I must say he is a distinguished leader with remarkable journey shaped by his military service, and unwavering commitment to energy efficiency and sustainability. Since founding greenlink in 2011 Austin has steered the company to remarkable growth expanding its services to include solar and HVAC divisions, and leading a team of nearly 60 professionals. Jim Keeling's business law practice focuses on organizational and transactional matters including mergers, acquisitions, and real estate.

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He advises clients in estate and finance planning, real estate development and guides closely held and family businesses on ownership relations and succession planning. Jim was previously henshaws national commercial transactions practice group leader and serves as a partner in charge of the firm's Rockford office. And he also chaired the board of Hinshaw consulting. With that, I welcome Austin and Jim and Austin, why don't you kick us off with a few introductory remarks?

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Sure. Thanks, Tim.

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Thanks for putting this together today. We're excited to chat and Jim, thank you for being here as well. Excited to have the three of us here to talk shop and share a little bit about the experiences that we've gone through recently with a couple of our most recent projects with our Savior's Lutheran and Rockford University, which we'll get into further. But first off, you know, as we go through this today, I really want to give accolades to love the greenlink team members. You know, we started our solar division back in 2018. greenlink was established back in 2011, as a building science company, and we focus a lot on the envelope and the weatherization pieces of energy efficiency. And again in 2018 2019 When we started our solar division, we really started to round out our services into what we now calls a 360 approach where we focus on the Building Envelope, we focus on the mechanical piece with our HVAC division, which we started in 2023. And then the renewable piece, where we kind of tie that whole system in together. And again, we've got an amazing team from people like Aj is our in house counsel and policy analysts, she was a key driver, and bring some of these really exciting incentives to the table as we work through our Savior's Lutheran, which again, we'll get into some of the detail on the value that she helped bring together on that, along with, you know, Jared, and the entire sales team, really digging in to make sure that we're getting the right data for our customers that were accurate with our projections and our proposals.

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And then obviously, our production team, which is phenomenal second to none, we believe they're one of the best in the region, at what they do.

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And so yeah, it's just really an exciting time. And we're honored to be here.

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Thank you, Austin and Jim Keeling. Well, thank

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you, Tim, as well and Austin. It is a great privilege to be here and have an opportunity to share some of our stories and experiences. As Tim had said, my career has been working with closely held family owned businesses. Sort of the sweet spot would be the privately owned lower middle market type companies and through those companies in the last few years, I have had the opportunity to review our purchase agreements or, or solar purchase agreements that they've had. As as, as solar is really spreading so quickly into our community. I'm also very active in the community in number of different positions. And as it relates to what we're going to talk about today, I'm a trustee of Rockford University, and I'm on the finance cabinet of our Saviors Lutheran. But I'm really interested in this initiative in Rockford, Paul sustain Rockford, which is a community wide sustainability plan for our community. And from that organization, I got introduced to to greenlink, who I had not worked with on, on the business clients. But when we, when the when, when things opened up for not for profits, basically, with the inflation Reduction Act in in August of 2022. I got really interested in how we could start to take advantage of the policies that have been established by our state and by our national government to to expand the access to solar. And so I've had a lot of fun over the last couple of years as a community members volunteer and that's my role with both Rockford University and our Savior's, it's not from my law practice, but it's in my volunteer work within within our community.

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For any of our listeners, either on the on this live event or listening to the recording, understand that we have extremely generous incentives in the state of Illinois, for behind the meter solar, the main program is called Illinois shines. And and then the adjacent program is called solar for all solar for all is the low and moderate income program. And what these programs do is they funnel resources from everyday consumers and business owners into solar projects. And literally, we all if you're in Amerind comed, or mid Mid American territory in Illinois, these are the IOUs the investor owned utilities, you have a small fee, it's about 2% of your bill that you're paying on a monthly basis. And that goes into a central pot, which is then allocated by the utilities to solar projects. And what this does is it shortens the payback period for facility owners that want to buy a solar project or host, a third party owned solar project. And it and so it makes solar affordable jumpstart jumpstarts the market you know in the United States, solar started on the coasts, California, Hawaii, New York, New Jersey, Maryland, and then has worked its way here to the center of the country where energy historically is very cheap. It still is relatively speaking, right? We pay very low rates per kWh for grid electricity, but now solar is competitive with grid electricity and so you can install a solar array and Reduce your power bill by 50 to 75%, you will never reduce your power bill by by 100% Unless you go off grid with a very large battery. And that is a heavy lift. But anyway, that is the basic premise for facility owners that you can reduce your power bill, all the while using green electrons, right? We're collecting photons from the sun with solar photovoltaics. So the fuel is free. Once you install the technology, you get electricity from sunlight. It sounds too good to be true. But it's not. It's basic physics.

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And so anyway, check out Illinois shines if you're curious about solar in Illinois, or solar for all if you're in a lower low to moderate income community. So Austin, and Jim, from your perspective at a high level, why our churches and universities considering going solar?

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Yeah. Well, Jim, I'll let you speak on that.

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Since you're, you're on the boards, and you're one of the ones really driving that, and I can speak to it from our side, but I'll let you take the first run of that. Yes,

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well, it's, it's a double bottom line, is the reason first, first of all, it's the right thing to do. In terms of protecting our, our environment. You know, in the church world, we speak about how we were stoked given as stewards the garden. And we haven't always done the greatest job with that garden halfway. And so one way to, to start to take better care of the resources that were entrusted with is to use the one that's free for us all. And that's the power of the sun. So from an environmental perspective, it has really resonated with the members of our saviors, where we've done this and, and the other churches that I've been speaking with, that have heard about our saviors, and heard about Green Link, work with our Savior's wanting to emulate it, it has built a very strong community, within our within our church to the point that several of the members, when we initiated our solar, we had up what we call a forum, which is like a workshop, you know, information session for the, for the members of the congregation. And immediately, even before we were able to get our project done, they had solar panels on their homes, and through through green link. So, so the environment is the one big driver. And the second one is a second, a bottom line is the economics of it with the various incentives and the saving on electric bill, that, you know, basically, if you didn't have any incentives, if it would be equivalent to taking an endowment, and paying four or 5% on the endowment, you know, in the savings, that if we had paid for the whole system without getting any of the various incentives, which is not a terrible return in its own right. It's not enough to really get the job done for for endowment investing, but it's a lot of protection against future increases in electric bills that come and the economics with the with the incentives is really phenomenal, and can speak to how quick it all pays back.

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And I would I would add, Jim, I would add, Jim, that it really is triple bottom line, right? When we go solar, we're also reducing the amount of electricity we're consuming from historical sources, fossil fuel energy, and that there is a cost directly to human health, but also to the environment and to future generations. So good for good for a pocketbook, good for the environment and good for human health.

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Thank you interesting through we talked about the environmental impacts as I was first, you know, thinking about this concept of Greenlee back in 2011. One of my big drivers, I'm a big hunter and fisherman, and I love being outdoors. And as I was getting out of the military transition back into civilian life, you know, some of the solar technology was just starting to be deployed and released on some of the equipment that we would use. And so I knew that the energy space was a was a good area to be in it has a high impact for the reasons that you just spoke about Jim. And again, has been an avid outdoors Men, I thought wow, this is a, this is a great way to to make a big impact and, you know protects the beautiful nature that God has given us. And yet just a lot of upside there outside of the financial piece, which again in Illinois is just an incredible opportunity when we get into it later, and I look at the net costs on our Saviors Lutheran as an example. I mean, it's, it's an amazing opportunity, and really a blessing even to be able to take advantage of these opportunities, you know, for the churches and nonprofits.

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I wonder if we could go a little deeper into the, the church scenario, because, you know, the savings are very significant. Now, it depends on how you finance a project, if you buy the project, if you have the resources to buy the solar facility, your savings are going to be much more significant than if you do third party financing. But both are options. And by third party financing, I mean, there's a third party, a solar asset owner who owns the asset, and then sells the power from the facility via what's called a power purchase agreement at a discount over what you're paying for grid power. And typically, you would achieve a 10 to 20% Discount over grid power. With as I mentioned, you know, with with, when you own the facility, you could reduce your power bill by 50 to 75%. But, Jim, what was that conversation like in the run up to you know, pulling the trigger and really making the decision? And, and what were some of the pros and cons, I guess that the decision makers were considering.

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For the church, we formed a, a joint committee ad hoc committee of some people involved in finance, some people that are on our ration care, which is our environmental group, and our facilities, people. And we learned immediately that we had one good roof that would support solar without any additional work being done on it. And so we focused on our first phase of our project. And to that, that's a gymnasium type building. And it hope now hosts enough panels to produce about half of the electrical power for the church, roughly. And that was a $300,000 project at its gross up costs.

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And that project is internally financed with church funds. And we looked at whether to, to borrow, but we always had in mind owning our system as opposed to dealing with a with a third party. Because of the Illinois shines program, the Commonwealth Edison, who is our provider up in our part of the state rebate, and the federal tax credits. Actually, our net cost of our system of our phase one of our system is about$12,000, we were fortunate enough to not only get the 30% investment tax credit, but also applied for with the help of AJ Young who Austin talked about the United States, the United States Department of Energy and IRS have administered a low income area program that our church qualified to apply for it's more or less a lottery for an additional 10% federal tax credit. Now, you may be wondering how are not for profits? You know, getting tax credits, they don't pay taxes, how do they you know, how do they get the benefit from the tax credits? And the answer to that is that, and this is the critical point there to create almost parity between not for profits in for profit businesses and individuals. It's a refundable credit. That is after a system is completed, there's a tax filing and then a check comes back from the Internal Revenue Service. In our case, that'll be 40% of that 300,000 which was about $120,000. That will come probably next summer in the summer of 2025. So there's the first thing is, you know, there's a growth, there's a gross cost and there's a net cost. But you got to bridge between the two because you don't just pay the net cost and have somebody else wait to get the incentive payments. You know, like episodes, when you get a like, a rebate on a car or something that is just taken out of the price doesn't work that way. This is an investment tax credit you have to carry for a year or so it's going to go on our 2024 tax return as well are phase two that we're working our way up to. So so we're expecting to file down in early 2025, and then actually get the checks in mid 2025. Now our church had enough money in its various funds to be able to internally finance without going to the bank. And it's chosen to do that. Though the other pieces you had mentioned, the Illinois shines program. And they're based on their production of the system, that the tax credit is based on the cost of the system.

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The the Illinois shines program is is based on the productivity of the system. And there is a an application to get enrolled into that program that is provided in the wraparound services that that greenlink has provided for us and got us enrolled in that.

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And then there is a substantial amount that comes back from that program over a seven year period, and actually a small amount after 15 years that drives down this cost when you get go from 300,000 to $12,000.

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You know, that's $280,000, that's coming back for the for the system. So they're really only if you have the cash, the really only the cost is that 12,000 Or if you didn't get the bonus, it would be 40,000. And and then the cost of the carry between the money coming back.

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So it makes an incredible, you know, return on investment, when you're saving 13 or $15,000 in electric bill, you know, starting when the system goes live. Yeah.

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So just to recap, and then I want to get Austin's perspectives from the installer perspective on some of this stuff. There's the way a solar array pays back for the for the for the host is energy to grid, right, the the solar is producing electricity, so it lowers your power bill, you get tax credits. In this case, Jim is referring to something called direct pay for nonprofits. And the EITC is very generous 30% Plus, they got an adder for low income, so they got a 40% tax credit. And then there are cash incentives, like renewable energy credits. In Illinois, we have a very robust renewable energy credit market, one megawatt hour of electricity is one wreck. And that is equivalent to something like 30 to 40% of the value of the system coming back to the host, in a check is paid out over seven years. So it's not a one lump sum, but it's significant checks over time. And the net result is that you Yes, you have an outlay at the front. Okay, but you're getting significant portions of this, of this$300,000 back and then you're cash positive within five years.

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So Austin, Jim mentioned things like roof condition. And I'm curious from the installers and the wraparound services that greenlink offers, walk us through, if you would, Austin, what are some of the key steps in developing a commercial solar project?

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Sure, yeah. So as we start off in a project and kind of do what we call a qualification conversation to understand really the needs of the customer, something about solar's it's not just a cookie cutter, one size fits all and say, hey, I'm interested in solar, okay, great, this is what you're gonna get. It doesn't work that way. It's very custom, we want to make sure that we're providing the exact service and catering towards the needs and goals of that customer.

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Different customers and entities might have different objectives when going solar outside of you know, a couple of the biggest things that we spoke about already. And so once we have a really good understanding of what that customer wants to do when it's possible, we always like to look at installing on the roof if we have a suitable roof structure. So the condition of that roof like Jim talked about, we broke our Savior's Lutheran into a couple different phases for that project. But phase one we attacked, you know, the the roof that had good condition and good shape so that we could move forward there.

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We're also going to be looking at the electrical infrastructure looking at the switch gear and and the main servers coming into the building to understand what phasing it's in and how we're going to interconnect that system into the grid. One of the things that we use is Aurora as a design tool and So we put in the customers are gathering all their utility bills. And we're putting this into the design software to say, if we design the system with X number of panels, what kind of offset is that going to give us will typically look to get around 100% offset, in some cases, we're going to be a little less or a little more, again, depending on the customer's goals. But this design software is going to take into consideration you know, environmental impacts, such as you know, snow load in the snow in the wintertime, you know, we know that we're going to have some days where that solar system is not producing power.

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And that's where the beauty of net metering comes into play.

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And net metering is essentially almost like a virtual savings account throughout the year, where on days, when you're over producing, potentially making more power than your building is using, it's going into the savings account. And on days where you have lower production, but you still have that draw on the consumption side, you're pulling back out of that account. And so we're walking through that with the customer through the design, we're talking about net metering and the incentives. And there was something to that I want to touch on the Jim and mentioned, you know, talking and you touched on to Tim with the elective pay, that had not always been the case. So if you're a non for profit, and maybe you looked at solar back in 2020, or 2021, that option didn't exist. And so as a nonprofit, you were not going to get that great financial ROI, like you can do today, they built that into the inflation Reduction Act that passed in 22.

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And they really changed the game for nonprofits to be able to maximize the benefit of going solar. And again, there's a number of adders, again, that are tied into that. There's domestic content, there's energy communities, there's low income communities, and there's a number of different ways that we can look to try to maximize that value for the customer. And that's also part of what we're doing during that design process. We're not only looking at how the system is going to be potentially constructed, but we're looking to see what are the economics of this? And how can we provide the most value for our customers by stacking these incentives and rebates that exist?

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I think we should talk about Rockford university because this is is a nice contrast to the church project.

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The Rockford university project is a much bigger project, more stakeholders, probably a more complex decision making process and and Jim was integrally involved in that as well. And what I'm particularly interested in here, gentlemen, is the relation ship, ultimately between the host and the installer. You know, one of your challenges as a facility owner is finding a credible qualified installer who can provide, as Jim says, a wraparound service, it is so important, and there are so many nuances to securing incentives in a timely manner, that you really have to find the right partner on a solar project. So Jim, why don't you paint a picture for us? How did that project get started? And what ultimately led Rockford University to working with greenlink on that project?

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Yes, so. So, last year, about this time last year, I was at one of the trustee meetings, and the topic of the discussion started talking about solar, a little bit of update about the inflation Reduction Act, and whether we could start to explore. And so just like at the church, a task force was put together of trustees along with with key administrative staff, the CFO of the university, and the the vice president of operations and facilities. And we started studying you know, how big heart need us now Rockford University is about 900 full time students about 1200 or so, full time equivalent students has about 400 residential students have a whole number of buildings and have a lot of roughs that need work. And we wanted to find a field first, even though you know, Austin said that, you know, the systems. You know, he looks for the buildings first.

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We tried to find a field we have we found a field. We were discouraged by by greenlink, who was doing some of the exploration with us by now I had a nice, trusting working relationship with Austin and his team from our saviors. And they knew that they weren't, you know, might end up getting into a bidding situation, you know, on this project. And so we together, explored which reps were worked, what the power situation was for the university, the university's buildings were built centrally in the 60s. And we have eight smaller dormitories, and a gymnasium building that were identified as having the structural integrity to host solar. And we were trying to get about 10% of our usage of the power usage of a university is shockingly high. And we saw an opportunity for the same economics that we were talking about related to our Savior's on a larger scale, because it's about four times the size of the project of the of the two phases of our Savior's. And so by the fall, we were ready to move ahead to the point to apply for the same adder of investment tax credit that we had. And we have a fiscal year of June 30. So in the fall, we did get other bids, and focused in with green link through the process. It made me very happy because I felt that we had the relationship for that wraparound service that we needed. I didn't know the others as well. There are other companies that do well in our community. But the others that were on the committee felt also that Green Link was the right partner for the university. So we applied and have not gotten the extra 10% investment tax credit. In this case, we have third party financing, that we're finalizing. This system is in the process of being involved, you know, as we speak, Austin can speak to its status in terms of completion, as he's working this job real hard for a window universities have a June 30 fiscal year. So we are hoping to be active to by June 30. Two, and here we are may on May 1, but active and finished to be able to apply for the for the tax credits in our county, fiscal year 2024, June 30 2020, for tax return, I hope it's another, you know, first phase of a project that that goes on, and maybe go back to the field for another piece of it. But as roofs are replaced on our buildings, try to try to phase in and do a lot more.

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As Jim pointed out, you know, one of the first considerations for any facility owner is can we do roof, roof based solar, which is wonderful, or can we do Grom mounted and the challenge with Roof Mounted is roof condition first and foremost. And you know, you don't want to solarize a roof that's more than 10 years old typically. And so that can quickly become a challenge but in this case they they opted for a combination. Austin why don't you share some remarks about your experience working on the Rockford university project?

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Yeah, I I've got a couple of thoughts on this actually. So you know, one of the things I'm going to kind of zoom out a little bit as, you know, potential entities looking to explore going solar, you know, Jim talked about we had this existing relationship and so we were able to segue and start to have that conversation with Rockford university. But you know, it's really important we talk to our potential customers quite often say you really need to explore local first, and even maybe somewhat regional. It doesn't have to be just in Rockford. But you want to make sure you're talking to a company that's vertically integrated in a lot of cases or that has the people in place. So example for Greenleaf he talked about the wraparound service.

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You know, I've personally been in contact with the president of our youth throughout the project and the board sending updates constantly, because solar is complex, and making sure that expectations are set correctly.

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And that communication is open and flowing. These projects aren't something that happens in a couple of days, or our use case not even a couple of weeks.

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It's a long term project and there's lots of moving parts and just making sure that everybody knows where we're at. And if there are questions or concerns that you can get to the right person to ask those questions and get those status updates on a project. We've also got our production team that's in constant and communications with the director of operations out at RU. And they're talking daily saying, Hey, here's what we're doing next. Here's what we did yesterday. And just making sure that everything is fluid and efficient in that sense. And, you know, we see in here and they talk about the locality, because in the solar industry, there have been some trials and tribulations with this emerging growing industry, where some companies are popping up, and they're not planning to stay around with their newer, they didn't make it, whatever the case may be. So looking at the history of a company, and the locality, I think, is really important. Maybe even understanding a little bit of the organizational structure of a company that you're exploring to work with as well. For example, you know, our production team, we've got our customer success folks and our project managers, again, that are engaged and really care about the success of these projects. It's not just a number for us or for our team members.

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We want to make sure that our projects are successful. And Jim, you correct me if I'm wrong here. But I believe that, you know, through the years of service that we've had within the community here in Rockford, when you guys began to speak to, you know, all the members at Rockford University, about this project, I think there were several folks that we have actually worked on their homes or maybe other businesses before, and they had that five star experience and felt that it knew from past experience that we were a good contractor and a good group to work

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with. Absolutely, yep.

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But that was that was pretty neat to see it all come full circle, in a

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community of our size, you know, they're there.

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There's a high probability that that will occur that that people will know and have had prior experience and so forth.

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Withdrawal really helps to build stronger relationships.

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So what was it like? And this is for both of you. This is a question from Jared, what in terms of the stakeholders? Were you? Were you able to achieve like a complete consensus? Or what were the challenges that you had to overcome along the way in, in basically making the decision to do the project and do it at a certain time?

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It was interesting, you know, in both situations, we would collect the questions and do kind of an internal, of frequently asked questions that people had, and we, and we would furnish those to Tom Anderson, who works for Austin, and he would also answer the questions.

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And so when we got the on the, like, the church council, and we're going to have the forum.

00:38:21.400 --> 00:39:32.050
We actually at the church council, you know, a couple of the members of the council are pretty sophisticated business people, you know, I was able to furnish them the material that we'd already done and and they said, well, they answered all my questions. One of them we weren't doing any storage, one of them said, I'm so glad we're not doing storage. I suspect where there may come a time when we need to review that, you know, if if this situation with peak demand charges, continues on as it's we're seeing this happen in California. But anyway, it was unanimous vote as a couple we had to have a congregation vote because of the size of the expenditure under under our Constitution. And the the the second project that will be up for that comes that congregation vote here in the next month. And I suspect it will be unanimous as well. There has been no pushback at all.

00:39:28.000 --> 00:41:06.699
Everyone is very proud that we've done this at the university. It's largely the same the first time it was introduced to the to the university community was at the they have a meeting a kickoff meeting in August. You know, at which time the President asked that I speak and chair that we were exploring, you know that we hadn't made any decisions at that point of The the support was, was very strong and, you know, or for a university to respond on the environmental side. It was was really strong on the fiscal side, there's always challenges related to competing investments for a university, you know, why are we doing this, when we need to have better a science lab or whatever it might be, there's been hardly any of that. But we've been very sensitive to that, to show and to share how, how this project pays for itself, and actually facilitates other investments by the university in different programs or different facilities. So no problems, you know, on those fronts, with enough communication, and sharing of information, and, and the like, to the point that people shift and want to do it for their homes.

00:41:07.510 --> 00:41:47.710
I'm glad you brought up the the issue of resources, you know, these are significant purchases, for any organization, for profit or non nonprofit, investing in solar facility is a major upgrade to your facility. And like you guys have said, it does pay back. But the challenge can be that there's competing interests for those dollars, you could do some other facility upgrade, you could do r&d, you could do some hiring, or other type of expansion of the business. And so getting through those getting through those competing interests is is very important.

00:41:48.309 --> 00:42:24.099
Yeah, and I just want to add on a little bit, that while we were doing this, we have stress test our borrowing capacity. And the answer that came back from our financial institution, and independently from another financial institution in our community is that they do they will not count the this financing against our borrowing capacity that they even would finance without collateral.

00:42:24.789 --> 00:43:15.400
Seven year fully amortizing financing, because they view the the incentives that are coming in to be a third party of third party funding, plus the energy savings. So it is something that that businesses need to know as well as not for profits, that that would be at conventional rates. And of course, the not for profit, in this case are the business, you know, has to has to have its own sustainability, to for it to work, they've got to they've got to be able to know they're going to be there and in in business for 10 years.

00:43:10.030 --> 00:43:23.559
But But still, it would not borrow, again, not cost, how many counts the overall borrowing capacity of the university or the church?

00:43:24.579 --> 00:43:34.750
I want to get I want to get into some of the nuances of financing solar projects. And before we do that, Austin, did you want to say anything else about stakeholder engagement?

00:43:37.059 --> 00:45:00.489
Yeah, you know, I think maybe stakeholder engagement, you know, one of the things that had came to my mind is, you know, some of the challenges and uniqueness with Rockford university that I had a couple notes to share. And that's, you know, when you look at a large commercial industrial scale, solar project, whatever, either side of the meter, you know, those projects typically take many months, two years, even sometimes to get through that pre what we call pre production, the development phase, in order to move into construction. And one of the unique things you know, we kind of had a goal with Rockford University. And we were kind of locked in there and a couple different fronts, A, we have the end of their fiscal year in June, where they want to be able to claim for those tax credits, which makes a lot of sense to us. But then we also had the block the strike block that was gonna be closing at the end of May. And so we wanted to race to get that interconnection approval, in order to then move in to get the extra contract signed and secure those higher value SRX. And so that took a lot of collaboration between both groups to move that forward at a speed which I've never seen. I didn't even know for sure if it's possible to move that quickly. But we were very fortunate and had some favorite throughout that process, in order to again secure the higher SRX and certainly feel very confident that we'll hit the deadline of the install date before the end of the fiscal year for the unit. versity

00:45:02.530 --> 00:45:23.380
we've got about 15 minutes left, if you have questions, please put them in the q&a. And we will answer those live. I want to talk about financing. You know, you mentioned Jim, this issue of credit worthiness, basically, right of the of the institution.

00:45:18.219 --> 00:45:57.519
And there's many ways to finance the solar project, I'm gonna give you the very high level, and then we could maybe delve into some of the nuances of what these two institutions have done. But you can do a cash purchase, right, where you just buy the equipment, you can do a loan, okay, if you don't have the cash up front, you can get a commercial loan, this is well established in the commercial banking world. So most regional, or larger banks are very familiar with commercial solar.

00:45:52.960 --> 00:46:40.300
And then you can do a operating lease, there are a handful of vendors and greenlink. And other installers can point you to those vendors for operating leases, which is very similar to a vehicle lease. And, and then there's a power purchase agreement, where you're just buying the energy from the from the system, and a third party is owning the asset. Now in in both of these cases that we're talking about here today, they did cash purchase, as far as I know, or some type of, you know, host owning the array. But what comments do you two have about financing a solar project? Both both, you know, specific to these, these cases we're talking about, but in general?

00:46:41.739 --> 00:47:54.070
Yeah, I, you know, like Jim mentioned earlier, one of the big things we're finding is where a lot of banks and financing mechanisms are looking at this, and they're not hitting on the debt to income side, for the future ability to borrow and raise capital or finance capital for different improvements. You know, we have manufacturers who say, Well, we're looking at either going solar, or we want this new piece of equipment. And as we continue to grow into this, and what we're finding is that that's not the case, you don't necessarily have to make that decision between between either or it can, you can do both, you have to time it and work with the lender appropriately, of course. And another unique thing, too, that we see with the amount of the incentives that we have, and depending on individual project specifics, but we've seen many cases where the incentives will actually fund or make the payments on that bridge loan or that loan as you recouping to get to your net costs on that system, where a customer will never necessarily need to pull money out of their pocket to make those payments. If the timing all lines up, that is a possibility. Which is really incredible. I mean, I don't know what other things you can purchase in life, where the incentives are gonna pay that loan back for you, you get to your net of little to no cost.

00:47:50.500 --> 00:48:37.750
And then you have all the upside of the positive cash flow and the lower operating expenses beyond that point. You know, we always look to try to help a customer looking to purchase, even if it's financed. As a starting point, the ROI is going to be the highest by far. But then you can look at power purchase agreements, maybe you know, there's particular goals that an organization has, where they don't want to, they don't want to borrow the money at all, they want it off the balance sheet, they can look at these power purchase agreements, and still capture some of the value and kind of hedge against future price increases for the utilities as well, which is unique, so they can almost fix their operating costs. In a sense. Those are some of the big things that we look at. But again, where it's possible, a purchase is going to be the highest ROI for a customer

00:48:39.760 --> 00:49:04.929
experience has been similar with the business clients that got into the leasing arrangement, the actual the financing cost of that I mean, these could be fair market value or $1 buy out after a period of time. It's really just a loan in a different wrapper.

00:48:59.320 --> 00:49:42.639
And they tend to be fairly high interest rates compared with bank rates. And we we are exploring trying to get a a advantage Illinois program loan for related to the Rockford University, which is a program that the Department of Community and Economic Opportunity has to work with a bank to drive down the the interest rate by blending an interest rate together. And we're waiting for news on that. As we as we're talking today.

00:49:44.559 --> 00:49:50.710
That interest rate Jim That's lowered significantly when you look at that blended rate. Do you recall what that is versus the market rate?

00:49:50.980 --> 00:50:08.139
Yeah, we, for us, our market rate would be seven to seven and a half percent and this is 4.75 percent that are, say, four point 4.7 to 5%.

00:50:02.469 --> 00:50:53.019
Again, the seven year, you know amortization to it. So it's really significant. With at our church, the funds that we used, you know, until two years ago, we didn't do any cash management of our cash because the short term interest rates, so we could get on our cash were virtually zero, you know, like, point oh, 1%, or something with the higher Fed rate, you know, we're we are making a little over 5% on our cash that we have, we've taken all of our funds and kind of bundled them together. So that's essentially our cost of if I did not get tagged making the 5%.

00:50:49.000 --> 00:51:21.250
That's, that's the cost of our internal financing. To do that, the project in No, I talked about that being a $300,000 project, their projections, with a 4% annual increase in electric bills. And a modest, I think it's point four or 5%, of degradation of the system as it gets less efficient. Over the years as the equipment ages.

00:51:22.239 --> 00:52:41.469
There's $730,000 of electrical savings off of this $300,000 project, the net present value, add that money, but that's how we manage our electric costs for the future. The same thing will repeat in our fees to where we'll be up to 80% of our electric bill, having been saved when we do this second phased our second phase, incidentally, we've done a roof that we just finished to host the second phase of the solar system and solar panel system. And the we get some tax credit, also related to the roof work, although it's fairly modest, because it's the incremental cost of the new roof to as to what it costs to be able to safely and structurally close the solar as compared to a flat roof in this case, that might have been replaced if we weren't ever considering solar, but that part of our cost will be qualified for the investment tax credit as well.

00:52:43.420 --> 00:52:45.039
You want to come in Tim?

00:52:45.789 --> 00:53:28.869
Yeah, something we haven't talked too much about yet either, which is something that to be considered for all nonprofits is Illinois solar, for all and we're talking about Illinois shines, which is, like we said a little bit of a different pathway. But in cases where a customer candidate qualifies Illinois solar for all is another opportunity where there's higher extracts, there's Oh nm and some other features that are built into those projects. And a structure for that, and a lot of cases can lead to where there's no loans being taken at all on the customer side, in order to get this, you know, 234 $100,000 system installed, there's two primary drivers for that one of them is through a lease, which is actually a six year lease.

00:53:25.960 --> 00:54:04.389
And then on the seventh year, that system is donated back to the customer. And then we've also seen where a customer can get even a better ROI, if they are interested in capable of doing a bridge loan, while they wait for those extracts to come back in. They can own flat out on that system and have it paid for, you know, in a year or two, and then have all the upside from there. So again, the only solar fall has higher Asterix, and in some cases, again, where a customer qualifies highly based on geography. You know, that's, that's something that we would explore as well. So between Illinois shines and Illinois solar for all, it covers everybody in almost every case.

00:54:04.449 --> 00:55:01.929
I think this really, this highlights the importance of having a very experienced installer who really understands the programs, and can help you dial in the best incentives that you're that are accessible to you as an institution in our last few minutes together. Well, there is a there's one question here that I really want to get to which is the the impact of storage we have a question from rich about adding a battery. How does and we're gonna talk in in very broad strokes here, but the question is, does adding a battery help an organization leverage incentives and create greater ROI and I know that that green link is just really getting into the commercial storage space. But Austin, can you make a few high level comments about why commercial customers should consider Adding storage to their solar project.

00:55:02.860 --> 00:55:03.219
Sure,

00:55:03.250 --> 00:55:36.969
yeah, I can touch on a high level. And then Tim, you know, if you want to add on to that, I know you've got a lot of depth of knowledge in the CNI space with storage. But But essentially, you know, you got a couple of major impacts, you got the first off, which comes to everybody's mind right out of the gate is the resiliency, having that backup power. So a common misconception in the storage Solar World is, if you don't have a battery, and the grid goes down, your solar system is going to shut down, it's going to quit producing power until the grid is restored. And the system is sensing that grid power, and it's just shutting itself off.

00:55:37.179 --> 00:56:17.380
Once it senses that power is restored, it'll turn back on and begin to do its operations as normal. But the really exciting thing is with battery storage and the CNI space, you can really use that tool to generate positive cash flow, you're hitting against demand charges in a way that you would not otherwise be able to do with just having a solar system. And these batteries can be programmed to monitor what the utility companies are charging, monitoring their grid versus what the storage is on that battery. And look at almost a sense of arbitraging the energy that's stored in that battery to generate another stream of revenue for those customers.

00:56:18.280 --> 00:57:50.889
Well said, yeah, a battery can give you resiliency, that is a super valuable depending on your circumstances if you have brownouts or blackouts, and then there's a stack of value that it can provide, you can attack what are called capacity charges, or demand charges. And then you can do, you can provide grid services like frequency regulation. So finding an installer who has robust partners, in this case, like intelligent generation, who can really explain this complex value stack of storage storage is deep water. But we do have a very generous incentive in the state of Illinois to enter $50 per kWh for batteries. And so batteries are going to be cash positive in many cases in just a couple of years. And overall, reduce the the simple payback period of a solar and storage project compared to just solar alone. So the answer to your question is yes, you should definitely be considering storage. The downside of storage projects is that it increases the capital expenditure with the capex significantly Am I double the capex? And so if resources are tight, then that may not be a consideration for you. It also makes the project more complicated. But as we've seen on numerous commercial industrial projects with greenlink, recently, it is a tremendous value add. I want to be respectful of our audience.

00:57:46.960 --> 00:57:53.949
And we are going to wrap up, do either of you have any concluding remarks?

00:57:55.000 --> 00:58:28.510
Sure. You know, I just as everybody may have learned throughout the day, if you're not deep into the solar industry, and you hear this conversation, and a lot of the acronyms and policies and programs that we're talking about, you know, that's that's where like Tim said, it makes sense to have a good partner and a good installer, and between greenlink with our internal team, but equally and equally important is our external team folks like Tim, and intelligent generations and all the different groups that we work with, allow us to really maximize the value that we can bring to a customer in their project.

00:58:29.769 --> 00:58:30.489
Keeling,

00:58:31.059 --> 00:58:48.400
I just like to thank you for including me in the in this webinar, Tim, it's it's fun to talk about and reflect on the projects and the impact that they're having, you know, in our such positive impact they're having in our community.

00:58:49.929 --> 00:59:20.199
I want to thank our speakers, Austin Carr, the president of Greenlink Energy Solutions, and Jim Keeling partner at Hinshaw law for being with us today. Check out all of our content and cleanpowerhour.com. Go to the events tab. You'll see we have several upcoming events. And in the pre show, Jim was talking about an event there in Rockford. There's an event sponsored by sustain Rockford in July. Jim, could you give us a quick preview of what what that event is going to be?

00:59:21.369 --> 00:59:46.420
It it is a community workshop on related to solar. In our community. I think it's July 17. I'm not 100% sure of that. But if anyone listening wants that information, they can just reach out to you, Tim and I'll be sure that you have all the information.

00:59:46.449 --> 00:59:54.434
Yep, we'll put that link to that event in the show notes. And in the email that goes out to registrants.

00:59:54.512 --> 01:00:03.648
Again, thank you all for being here. I'm Tim Montague. Let's grow solar and storage. Take care everyone Hey, listeners.

01:00:03.726 --> 01:00:36.282
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Let the Sun Shine In: How Churches and Colleges Can Save with Solar with Austin Carr and Jim Keeling | EP208

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