Dimension Energy has managed to raise $650 million in construction and long-term financing to support a 132-megawatt portfolio of 25 community solar projects located in Pennsylvania, New York, New Jersey, and Illinois.

The deal has seen the company raise $415 million in debt financing from a group of lenders consisting of First Citizens Bank, Mitsubishi UFJ Financial Group (MUFG), ING Capital, and National Bank of Canada. In addition, the company has raised $235 million in tax equity financing from Franklin Park, which is a first-time partner with the company.

This deal represents the largest financing deal so far with Dimension Energy and demonstrates the interest of investors in distributed generation assets, especially community solar projects, due to the increasing cost of electricity in the United States.

Increased use of community solar

This deal represents the increasing use of community solar as a segment of the United States’ renewable energy sector. This segment provides access to solar energy without the need to install a solar panel system at a customer’s premise. This provides the customer with the advantage of saving on the cost of electricity while at the same time reducing the reliance on long-distance transmission infrastructure.

Dimension Energy’s portfolio of community solar projects is expected to take around 18 months to develop and go online, which is a relatively short period and represents the attractiveness of community solar projects to the company and its partners.

Financing structure and partnerships

The deal brings together a combination of traditional project finance lenders and tax equity investors, a combination often utilized in U.S. renewable energy development for monetizing federal incentives and managing capital costs.

The involvement of Franklin Park brings a new institutional investor to Dimension’s financing landscape, while the return of the lender group underscores existing relationships that have enabled Dimension’s growth in various markets.

The deal is part of an overall trend in distributed energy development. Especially as utilities and regulators seek more expeditious solutions to address increasing energy demands. Community solar projects, being smaller in scale and closer to consumption centers than utility-scale projects, offer an attractive alternative for large-scale renewable energy projects.

States like New York and Illinois have been at the forefront of community solar markets over the past few years, driven primarily by supportive policy environments and subscription needs.

What’s Next

The projects can now proceed to construction phases in the respective states, providing incremental capacity additions for key markets.

The projects can also be seen as an opportunity for Dimension Energy to expand its overall development pipeline in an environment where competition is increasing among various developers looking to capitalize on existing policy incentives and overall demand for locally generated clean energy.

Project Factsheet: Dimension Energy — Community Solar Portfolio Financing

Overview

Dimension Energy has closed its largest-ever project financing to fund a portfolio of distributed solar assets across four states.

Deal Highlights

• Total Financing: $650 million
• Portfolio Size: 132 MW across 25 community solar projects
• Markets: Pennsylvania, New York, New Jersey, and Illinois
• Transaction Type: Construction and term financing

Capital Structure

• Debt Financing — $415 million: First Citizens Bank, MUFG, ING Capital LLC, and National Bank of Canada
• Tax Equity — $235 million: Franklin Park (first-time Dimension partner)

Project Impact

• Provides subscribers with direct savings on utility bills
• Generates power close to the point of consumption, reducing reliance on long-distance transmission infrastructure
• Projects are typically developed and brought online within 18 months

Advisors

• Financial Advisor to Dimension: CG/CRC-IB (exclusive)
• Counsel for Dimension: Stoel Rives LLP
• Counsel for Lenders: Foley & Lardner LLP
• Counsel for Franklin Park: McDermott Will & Schulte
• Independent Technical Advisor: Enertis Applus+