As an increasing number of government facilities and commercial properties utilize energy-efficient measures and equipment and consider switching to clean energy sources, commercial real estate services companies are feeling the need to educate their clients on green choices, as well as maintain and monitor green buildings and their operating systems.
In 2010, global real estate services firm CB Richard Ellis established the CBRE Solar Services office in Portland, Ore., in partnership with Smart Energy Capital LLC, to help real estate owners, operators and investors achieve renewable energy objectives, reduce operating expenses and maximize the value of their real estate assets through efficient, standardized and transparent processes. CBRE Solar Services’ offerings include providing 100 percent financed and managed on-site solar power systems.
The principals of Smart Energy Capital LLC had experience in asset finance and solar project development, having managed a portfolio of more than 300 megawatts of solar projects and raised in excess of $200 billion of financings.
With 10 years of experience in renewable energy project development and finance as well as environmental policy, CBRE Solar Services Managing Director Mike Grenier has direct, hands-on experience in the acquisition, development, design and/or construction of over 8,000 megawatts of utility-scale solar and wind projects in the U.S., Canada and Europe, including the first utility-scale solar PV project in Canada and the first wind farm in Idaho.
In less than a year, as the former senior director of business development of SunEdison, Grenier constructed over $100 million in projects and acquired a 300-megawatt project pipeline representing over $1 billion in investment value.
NREI spoke with Grenier about what CBRE Solar Services offers clients in terms of energy project development and financing, as well as overall cost savings.
An edited transcript of that interview follows.
NREI: What is the relationship between the two companies?
Mike Grenier: CBRE partnered with Smart Energy Capital to form CBRE Solar, provide CBRE clients with access to a special $180 million financing vehicle, structured specifically for solar projects. CBRE Solar focuses on solar opportunities for key GCS and Asset Services-Strategic Account clients throughout the United States and Canada.
In addition to project capital, CBRE Solar offers the a comprehensive set of solar energy solutions, including advisory services, solar power purchase agreements, roof leases, project development services, project management services and solar project investment opportunities. CBRE Solar operates with the support of Smart Energy Capital, a leading solar finance and development firm. The principals of SEC have a deep background and successful track record in structuring and arranging innovative financing solutions and developing renewable energy projects.
NREI: Could you talk about some of the more creative financings that Smart Energy Capital has undertaken?
Mike Grenier: Few financiers actually have dedicated funding, and even fewer have all of the equity, debt and tax-equity that is needed to finance these projects. As a result, many projects fail because they lack some or all of the necessary pieces. Smart Energy has structured and raised a $180 million project funding vehicle that contains all of these pieces of the capital structure, and it is backed by top tier energy companies. This allows us to move quickly and clearly, when a client has an opportunity, and it generally allows us greater flexibility than other financiers in the market.
NREI: Who are some of your clients, and how much have they managed to save in terms of costs and their environmental footprints?
Mike Grenier: We recently started construction on a large project for the Town of Prescott Valley in Arizona. We will be supplying on-site solar power at their waste water treatment facilities. The systems are estimated to save the town over $1.5 million over the life of the contract. The project is estimated to produce over 2.7 million kilowatt hours of clean energy each year. According to the EPA, this saves an equivalent of 1,862 metric tons of carbon dioxide, or 4,330 barrels of oil each year.
NREI: As of June 2011, CBRE Solar Services expanded services to real estate investors and property owners to help them in developing large-scale solar projects that can sell power to utilities. How successful has this been?
Mike Grenier: In a very short amount of time, this effort has already been very successful. We’ll expect to be announcing a major utility scale project in the next few weeks that was originated through CBRE’s brokerage unit. Some of our most active markets right now are California (Sacramento in particular), Ohio, Massachusetts, Washington, D.C., New Jersey, Texas and Puerto Rico.
NREI: What can an investor or property owner expect from CBRE Solar Services?
Mike Grenier: While solar technology is simple, the markets, regulations and opportunities are complex. In some states we can develop on-site energy solutions that help an owner reduce operating costs. In other markets, we have immediate opportunities for investors to host a project and lease their roof or raw land to a long-term investment grade tenant. CBRE Solar helps property owners capture these opportunities where they exist, and constantly monitor the markets for new opportunities that arise. The solar regulatory landscape is constantly shifting, and timing is critical to securing incentives while they last. CBRE Solar helps clients analyze and prepare their portfolio so that opportunities aren’t lost.
NREI: CBRE Solar Services is based in Portland, Ore., but you serve clients throughout the country. Why Portland?
Mike Grenier: Portland, and the Pacific Northwest generally, has a deep pool of talent related to energy and energy technology. The energy policy of the region is often a model for the rest of the country, and this creates a unique business environment for companies working in the energy sector. Portland, in particular, has an amazing depth and breadth of companies working on renewable energy, energy efficiency, and clean transportation. It’s an exciting place to be, given that energy issues are constantly in our national spotlight.