Investor to rent roof space at Dorcas Ministries.
BY ANDREW KENNEY, firstname.lastname@example.org
CARY – Dorcas Ministries’ new home came with a valuable asset: roof space. The west Cary shopping center owned by the nonprofit will be topped soon by one of the county’s largest solar panel systems.
The thrift store and charity is using an increasingly popular model to power the installation. An unnamed outside investor will pay for installation of the project, then profit from sales of the solar energy. Dorcas, meanwhile, will get increasing rent revenue, starting at $2,000 a year, and an eventual option to buy the 236-kilowatt, 845-panel system.
“We bought the shopping center in 2008, and we’ve actually been thinking about it ever since then,” said Howard Manning, the nonprofit’s director. “We consider ourselves a green business.”
The 21,000-square-foot installation would be the largest hosted by a nonprofit in Wake County, and possibly in the state, according to its planners. It also would be among the largest solar plants in Cary, only significantly trailing the 2.2 megawatt solar farm at SAS Institute, which produces about ten times as much energy.
A 3-year-old Cary company, Yes! Solar Solutions, will install the panels. Kathy Miller, vice president, said the construction of the Dorcas project this month will be one of the company’s largest efforts.
This is Dorcas’ third attempt to bring in solar panels, following two failed negotiations with other companies. This time, N.C.-based Argand Energy Solutions brokered the deal with a third-party investor, helping Dorcas overcome the prohibitive up-front cost of the plan.
The investor will pay about $900,000 for the installation, but state and federal tax credits will return about 65 percent of that money over the years, according to Rob Lease, director of sales for Argand. He estimates the panels will generate about 30 homes worth of electricity, which the investor will sell to Progress Energy at an above-market rate for income of about $55,000 a year.
After about seven years, Dorcas will be able to buy the panels, which are under a 25-year warranty, for about $300,000. Eventually, the installation could feed power straight to the nonprofit instead of to the Progress grid.
“It’s kind of a win-win-win to the fourth level,” Miller said.
Betsy McCorkle, economic development coordinator for the N.C. Solar Center, said the investor model is particularly attractive for nonprofits because they can’t redeem the tax credits themselves. And in general, she said, “it’s gaining traction because people are figuring out how to do it.”
Argand retooled its business about 18 months ago to focus heavily on commercial-scale installations, and almost half of that business is now driven by third-party investors. For those who can afford it, a venture like the Dorcas panels offers about 12 percent return on investment and breaks even in about five years.
The town of Cary also has brought in an outside company to build and operate a large solar installation on town land. The investor model is practically the only way, McCorkle said, for nonprofits and governments to install large systems.