Community Wind Handbook/Research Financing Options
Research Financing Options
Due to the substantial costs involved with a large community wind project, most installations involve a variety of investors or a unique financing model to provide funding. Local lenders are considered to be one of the best sources of debt financing for large community wind projects. When beginning discussions, it is important to be prepared with materials to support your project. Lenders want to see a detailed project summary with cost estimates and a legal description of the proposed project site, including aerial photos and plat drawings if possible. You also will need detailed project expenses and income (monthly for at least 24 months and annually for 10 to 20 years).
Lenders may also ask for:
- Wind assessment
- Project feasibility study
- Proof of required easements
- Proven ability to manage a wind project
- Zoning and permitting approvals
- Turbine type and performance data
- Warranties and O&M agreements
- Decommissioning plan
- Interconnection studies and an executed large generator interconnection agreement
- Power purchase agreement (executed)
- Insurance details
- Business, financial, and risk management plans.
Many lenders have requirements of a minimum equity payment of 30% of the total project costs. The term note is usually amortized over 10 or more years with quarterly or yearly payments. The loan interest rate is vital as it is capable of determining the difference between a project that makes a profit and one that simply breaks even.
Other financing options are discussed in the following documents:
- Community Wind: Once Again Pushing the Envelope of Project Finance
- Community Wind Financing: A Handbook by the Environmental Law and Policy Center.
To ensure a shorter payback period for your large community wind project, research grants and other available funding sources.