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Alternative Energy - Tuesday, July 27, 2010

Creative Financing Helps Complete SunPower's Yolo County Project

Can't get financing for your solar project due to tough economic conditions? SunPower (SPWRA, SPWRB:NASDAQ) recently completed its 1 megawatt (MW) solar power system for Yolo County ahead of schedule through clever funding from multiple sources.

Though a combination of clean renewable energy bonds and qualified energy conservation bonds that were secured through the American Recovery and Reinvestment Act of 2009 and a 15-year loan from the California Energy Comission, Yolo County is now the proud owner of a 1 MW solar system at Yolo County Justice Campus in Woodland, CA. It's worth noting that SunPower helped Yolo County secure the loan from the California Energy Commission.

Bank of America (BAC:NYSE) also played a key role in the project as the subsidized bonds issued by Yolo County were financed by the banking giant as part of its $20 billion, 10-year initiative to address global climate change. But Bank of America's involvement is more than an altruistic gesture to improve its image after the Wall St. meltdown and subsequent taxpayer bailout. Being involved in this development makes perfect business sense.

Because of state and federal funding, Yolo County is expected to save $8.8 million in energy costs over the next 25 years and the system is already net cash flow positive because Yolo County did not have to spend any money to build the system that was completed 6-weeks ahead of schedule.

Despite being a relatively small victory, shares of SunPower were up 0.3 percent in early afternoon trading as shares of Bank of America faired much better posting a 0.92 percent gain as the Dow posted a small 0.08 percent gain.