MADERA, CA—A US producer and marketer of low-carbon renewable fuels, Pacific Ethanol Inc., is purchasing and installing a 5-megawatt solar photovoltaic power system at its biorefinery that produces ethanol, wet distiller grains and corn oil. CleanFund is financing $10 million of the project cost, the largest US Property Assessed Clean Energy commercial transaction to date.

CleanFund is a 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. It provides capital for projects using 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 property tax bills.

“The PACE program was invented to provide credit for long-term upgrades,” Greg Saunders, CEO of CleanFund, tells GlobeSt.com. “CleanFund is helping to build PACE and test cases for it. We are scaling up for that; we started out with six people and now have 25.”

The improvement represents the largest solar PV system (based on power generating capacity) to be funded through a PACE program. The system also qualifies for the energy investment tax credit, further improving its attractive investment profile.

“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,” says Neil Koehler, president and CEO of Pacific Ethanol. “We are proud to build the first ever commercial solar electricity system at a US 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 situated on 137 acres in Madera County. The 5 MW solar PV system is expected to reduce the Madera facility's annual utility costs by more than $1 million and will be cash flow positive from year one.

“We are honored that Pacific Ethanol selected CleanFund as its capital provider, and is utilizing our SolarPACE financing to install a state-of-the-art solar system on their amazing biorefinery,” says Saunders. “The demand for commercial PACE financing continues to grow rapidly because it provides cost-effective, long-term financing for renewable energy, energy efficiency and water conservation measures for most non-residential properties. We are excited to partner with Pacific Ethanol as it leads the way in the deployment of renewable energy power systems at its industrial facilities.”

The system will be designed and installed by Borrego Solar, a US provider of commercial-distributed generation solar energy systems.

“Pacific Ethanol represents the new generation of fuel companies—low carbon fuel production powered by zero carbon energy,” says 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.”

CleanFund's SolarPACE program enables commercial, industrial, other non-residential property owners and multifamily property owners to achieve immediate positive cash flow, with a financing term of up to 30 years to match the expected life of solar PV systems.

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Financing is Largest Commercial PACE Transaction Thus Far

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