Investing Private Equity in Solar Photovoltaic (PV) Projects
Overview
Cherokee Renewables, LLC is an affiliate of Cherokee Investment Partners, one of the largest brownfield investors in the world. Cherokee Renewables’ mission is to provide capital for solar developers to source, acquire, develop, install, own and sell solar PV projects ranging from 2 to 20 megawatts (MWs), primarily on brownfields.
The Cherokee Renewables team has developed substantive solar developer relationships, a growing pipeline of significant projects, and core skill sets to scale our business and generate attractive risk-adjusted financial returns. As evidence of the substantial Cherokee presence in the solar PV project industry, one of the Cherokee private equity funds was a key participant in the recent closing on the largest solar PV project in New England at roughly 6 MWs of peak power. This project is also located atop a municipal landfill, which will make it one of the largest solar landfill projects in the world.
Growth in the Solar Industry
The U.S. solar industry is in its infancy and is poised to grow faster than any other form of renewable energy. Consider a few statistics from the U.S. Department of Energy and the Solar Energy Industries Association:
- Global solar PV installations grew by 141% between 2009 and 2010.
- While Europe has dominated the solar market up to now, the U.S. is expected to become the world’s largest solar investment opportunity by 2013.
- Between now and then, growth in U.S. solar PV capacity will exceed 70% per year.
- The U.S. now supports a $6 billion solar industry and 100,000 solar jobs, which grew at a rate ten times faster than jobs in the overall economy.
The following list of key drivers will continue to bring solar electricity closer to grid parity in more U.S. markets in the next few years:/p>
- Total per unit construction costs for solar project fell approximately 40% between 2010 and 2011 and are projected to continue to decrease, especially for panels.
- Solar panel efficiencies and warranties have improved significantly in the last decade and are expected to continue to do so.
- Federal and state governmental incentives can reduce capital costs by roughly 50% and/or provide significant additional sources of revenue.
Why Solar on Brownfields?
Cherokee’s internal research indicates that there are over 1 million brownfield sites in the U.S. totaling more than 15 million acres. The unique advantages to solar project development on brownfields can include: faster permitting, reduced community opposition, easier interconnection, fewer endangered species issues, limited competition from the use of land for farming or forests, and greater municipal support because non-tax producing liabilities can be turned into assets again.
Why Cherokee?
Cherokee and its affiliates bring two decades of organizational experience across multiple private equity funds totaling over $2 billion of equity commitments, more than 100 seed capital investments and two allocations of New Market Tax Credits exceeding $150 million in aggregate. As the world’s only private equity fund with an ISO 14001-certified Environmental Management System, Cherokee has purchased over 540 environmentally impaired sites. For recognition of our leadership in environmental sustainability, Cherokee received the 2010 World Presidents’ Organization (WPO) Sustainable Business Practices Award, and in 2011 Cherokee’s CEO became a nominee for the Zayed Future Energy Prize, which is known as the Nobel Prize for energy.
For More Information
If you would like to learn more, please contact Joe Green (919-743-2020, jgreen@cherokeefund.com) or Chris Wedding (919-743-2029, cwedding@cherokeefund.com).
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