Recurrent Energy announced that Google and Kohlberg Kravis Roberts & Co (KKR) have invested in an 88MW portfolio of solar projects. The projects provide clean solar electricity to Sacramento Municipal Utility District (SMUD) under 20-year power purchase agreements. Three of the projects will be operational by the early in 2012 with the remaining project to come online later in the year.

The investment includes a significant equity investment from Google in addition to equity from SunTap, a new venture formed by KKR to invest in solar projects in the U.S. Recurrent Energy will retain a minority position in the projects and continue to operate them.

Working with Google and KKR on these projects has been a gratifying experience. Both companies are committed to investment in renewables and they worked hard to get the deal done before the end of the year.

Their investment is a clear demonstration of solar’s ability to attract private capital from well-­established investors. That’s a good indication of where the solar industry is headed as an increasingly mainstream energy source.

For me personally, there’s a nice symmetry to Google’s involvement in this financing. Back in 2005, I led the team that developed Google’s 1.8MW solar power system for their headquarters. It’s great to see that the passion that led them to be an early adopter of solar back then has grown into a large and very visible part of their corporate investing activity today.

Today Recurrent Energy announced a $250M construction debt revolver from Mizuho Corporate Bank for our Ontario solar PV portfolio. The four-year revolving facility will provide support to build roughly 200MW of new solar generation over 20 project sites.

The size and nature of the financing is pretty remarkable. It’s one of the largest non-recourse solar construction facilities in North America. The revolving feature enables us a great deal of efficiency and flexibility as we build the portfolio in stages.

The timing of the announcement reflects the fact we’re getting ready to start construction on the first of the projects as soon as the ground thaws in 2012.

It’s exciting to finally be at this stage in Ontario. Since the projects were awarded back in April of 2010, we’ve been working diligently to secure permits and get our supply chain in place to meet Ontario’s domestic content requirements.

The timing is also good news for Recurrent Energy’s business. US renewables appear headed for a rough patch with the failure of the Congress to pass critical extensions of the PTC and 1603 Treasury Grant programs before the end of the year. With several years worth of projects to build in Canada, Recurrent Energy has a solid line of work that is insulated from US policy uncertainties and should help us to ride through the political gridlock here at home.

Today Duke Energy announced the purchase of two Arizona solar projects from Recurrent Energy totaling 20MW. The projects provide solar electricity to Arizona Public Service Co. (APS) under the terms of two 25-year power purchase agreements.

We reached an agreement with Duke back in August to sell the projects. However, we decided to wait until after the projects were completed and operating to make the announcement. I think one of the most exciting things about it is that Duke Energy’s involvement is yet more evidence of solar’s growing role in the mainstream energy industry.

The projects themselves are pretty interesting. The Ajo Solar Project in Pima County (5MW) and the Bagdad solar project in Yavapai County (15MW) are both great examples of what we call ‘distributed wholesale’ power plants. They’re less than 20MW each and located near load centers, but the power they generate is delivered to the utility under a wholesale contract, which allows them to be financed more like a conventional power plant. 

The projects are also great examples of how solar can be sited in a way that makes use of lands with low environmental value. Both projects are located adjacent to large mine tailings. That means that this is a story about using solar to transform an otherwise useless location rather than using pristine wilderness.

In a very real sense, these projects represent the best of what ‘good solar’ can be: adaptive to local environments, delivering clean power where it’s needed most, reliable enough to work with utilities like APS, and bankable enough to attract the investment of mainstream energy companies like Duke. We’ve come a long way, baby!