Solar Installation Is a Multi-layered Process By David Streier | Newport Partners, LLC
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ike most projects, my first solar project with a condominium association presented a learning curve. First of all, the condo association I was working with — located in Uptown Minneapolis — worked with a property management company and was governed by a board of directors. At the outset, I knew I would need to fully inform each of the members of the board, as well as the property manager, about the project. This preliminary stage would entail a mixture of meetings, educational presentations, Q&A sessions, research, and follow-up phone calls and emails with additional information and data. The board and property manager would need to conduct due diligence and examine the terms and conditions of the various contracts I showed them. Our company, Newport Partners, provides tax credit equity and debt financing as well as project development services, so we had to work through a complex set of documents. As an attorney, I handled this process in-house, while the association sought legal counsel from its attorneys.
portion of the facility’s usage. The electricity generated by the system would feed into the service panel for the building’s common areas. The association would get the benefit of several thousand dollars of annual energy savings on common area utility bills. The board agreed that it made the most sense to tie into the service panel for the common areas. The association’s electricity utility bills would be reduced, freeing up more cash in the association’s general account. While individual owners would not see their utility bills go down directly, they could be sure that their association was saving money. This, in turn, would give the association a financial cushion to consider when setting members’ dues. The moment we had all been waiting for came during the condo’s annual summer picnic held in their courtyard green space. The mid-summer evening was thick with humidity hanging in the air. Darkening clouds were rolling in above, threatening an approaching storm. Not your typical board meeting.
There would be more meetings, presentations, questions, answers, as well as contract review and negotiation with the board, property management company, the association’s attorneys, and subcontractors. On top of that, Minnesota’s community association law required a majority of the members of the association itself to approve the deal because it involved a lease agreement. Needless to say, this would not be a slam-dunk.
The association had set up party tents under which volunteer condo owners served up hot food fresh off the grill, various side dishes, and, of course, cold beverages to wash it all down. These were the same tents under which we’d all have to crowd later on once the storm clouds opened up and released that night’s torrential rain. Before that could happen, Bill, the board president, called for everyone’s attention and began administering the vote.
By the time our team obtained final approval of the project, however, it had become a unanimous decision. Our proprietary solar financing program — we monetize federal tax incentives on behalf of tax-exempt entities and commercial customers — along with “Made in Minnesota” solar rebates we secured for the association made the economics of this deal very attractive to the customer. Even the few board members who initially seemed reluctant had changed their perspective: This was an opportunity to make a sustainable investment in clean, renewable energy resources that would yield environmental benefits while delivering a financial return to the association by generating utility bill savings.
He introduced himself and the solar project team: his fellow board members, me, one of the association’s attorneys, the property manager, and the solar contractors that would be installing the system (All Energy Solar). He gave the crowd a summary of the work the team had accomplished to date and outlined the steps needed to approve the project. The association needed a quorum present in order to hold a vote. The board confirmed this with a headcount. Finding out we had a quorum was a big relief, considering we had no way to ensure a sufficient number of condo owners would show up. It wasn’t over yet, though.
As expected, the board raised questions about the project’s estimated energy savings and financial return. A question I expect most community associations will raise is “who gets the benefit of the solar-generated electricity?” Would the association or individual owners get credited? This was an important issue that our project team tackled head-on. For this project, we proposed installing a Made in Minnesota Silicon Energy solar PV system with close to 40 kilowatts (kW) of generating capacity on the roof, enough to power a significant 18
Minnesota Communit y Living
Next, a member of the board read aloud a resolution. If passed by a majority of those present (since we had reached quorum), this would authorize the board to enter into the aforementioned contracts. We were almost there. At this point, I wasn’t quite sure how they would conduct the vote. I figured maybe it would be done on slips of paper submitted by each person. Perhaps they would vote through a show of hands or some other method that would allow the board president to count how many members were in favor of moving forward with the project. Instead, he announced they would be voting out loud.