Desert Hot Springs project - Courtesy Borrego Solar

The Projects Borrego Solar Deemed Doable

By Roy L Hales

Screen-shot-2014-03-18-at-3.43.47-PM1Borrego Solar acquires utility-scale projects like the Seneca Solar Projects every year. The projects’ previous developers reached the mid to late developmental stage, then decided to sell. A large number of utility-scale projects stall every year. That’s the end of the story for most of them. Some get a second chance. Seneca Solar’s portfolio is one of the projects Borrego Solar deemed doable and has taken on.

Seneca
Seneca Solar Project as it is right now (Click on image to expand) – Courtesy Borrego Solar

They broke ground earlier this month.

“There is a misconception out there about what it takes to get this type of project done,” said Aaron Halimi, senior project developer at Borrego Solar. “That’s why so many projects fail. There are many, many challenges along the way.”

Halimi described the problems projects encounter as coming from four main “food groups” of a utility-scale project:

  • There could be problems with site control, from some aspect of the lease or purchase agreement
  • issues with the underlying real estate, in the form of site specific issues, land use approvals, or entitlements
  • interconnection issues
  • a problem with the power purchase agreement

Additionally, a developer’s lack of finances is often coupled with one of the aforementioned issues.

“We look at plenty of projects, but we do not always go so far as taking them on,” Halimi said.

Borrego has developed a streamlined process of determining if it is fixable.

“We invest into the project, leverage our in-house developmental expertise to take those projects across the finish line by getting them financed and getting them built,” said Halimi.

Roughly 35% of Borrego’s utility-scale projects are fix-ups taken over from other companies. Some of these were started by mom-and-pop operations; others come from companies whose names are known in the industry.

“In the case of the Seneca Solar Project portfolio, the land use approvals were still outstanding, there were some other utility-related items, and it needed capital. Many times it is a capital need that is tied to another ‘food group’ item being outstanding. We need to come in, identify what needs to be done to get those issues resolved, and put our own money into the project to take it through that process.”

This portfolio of projects is the second portfolio that Borrego has undertaken from Southern California Edison (SCE)’s California Renewable Energy Small Tariff (CREST) program.

The success rate of this program has been low. Only 25% of the program is online, another 40% has been ‘terminated,’ and the remainder is in development.

“Not all of those in development will make it through,” Halimi said.

He added that CREST is a feed-in-tariff (FIT) program, and that it can be challenging to build small FIT projects.

“A lot of people underestimate the difference between a small utility project (1.5 – 8.5 MW) and larger utility project (20 MW),” Halimi explained.

Desert Hot Springs solar project - Courtesy Borrego Solar
Desert Hot Springs solar project (Click on image to expand) – Courtesy Borrego Solar

This is the second CREST portfolio that Borrego has taken over. The first, at Desert Hot Springs, went online last year.

The Seneca Solar Projects consist of a total of 8.3 MW of fixed-tilt ground-mounted solar projects in the desert near Victorville, Calif. The project will be built in two phases, the first of which occupies 40 acres of private land. They have approval to expand another 20 acres.

Once the developmental problems were resolved, Salt Lake City-based sPower (Sustainable Power Group) purchased the project and have become Borrego’s financial partner. They have a contract to sell solar power to SCE at a fixed price for the next twenty years.

The project is expected to produce 15,257 megawatt hours of electricity per year.

Borrego Solar Systems is one of the nation’s leading financiers, developers and installers of utility-scale power systems. They have completed over 1,000 installations. For more information, visit: http://borregosolar.com/

(Image at top of page: Desert Hot Springs solar project – Courtesy Borrego Solar)

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