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2 February 2011

Anova Energy Solutions launches $10m solar fund

US solar financing consultant Anova Energy Solutions has launched a renewable energy private equity partnership fund with a target of raising up to $10m in private equity and debt finance.

Anova said it will use the capital to further its development of commercial and industrial rooftop and ground-based solar photovoltaic (PV) systems. The Meridian Solar Partners (MSP) II fund may also be increased with a tax equity tranche using a partnership flip structure, Anova said.

Anova already has a solar project development pipeline for projects of up to 2.4MW in capacity, having developed more than 1.1MW in New Jersey last year. The consultancy closed its first MSP renewable energy private equity fund last year, raising $5m in equity and debt. Meridian Center solar plant, which was commissioned last October, is owned and operated through the first Anova MSP fund.

The managing partners of Anova also manage 11 real estate private equity partnerships with a total asset value that exceeds $40m. One of the partners, Gary Rafaloff, said he anticipates that this year will see property owners face good opportunities to maximize returns in solar PV investment.

Rafaloff said, 'We may currently have the perfect storm in 2011 for installing a system. The 30 per cent Federal Tax Grant has been extended; bonus depreciation has been increased; and system pricing continues to decline. In addition, in New Jersey, we have the nation's [US's] strongest SREC market.'

Despite the positive environment for renewable energy projects, lender financing still remains very tight; however, which is evident in small- and mid-sized third party ownership projects, according to Phillips. 'A recent survey we conducted with banks and leasing agencies regarding their terms for financing solar PV installations showed that none were willing to finance power purchase agreements,' he said. 'Some would consider financing owner occupied facilities, but the terms in many cases are prohibitively restrictive.'
Contrary to damaging the position for financiers in the solar market, the co-partners predict that the lack of available public financing will allow Anova to choose prime projects from numerous host properties in the US marketplace.

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