Renew Financial has raised $70 million in growth capital to expand its clean energy and energy efficiency finance products across the U.S.
The Oakland, Calif.-startup offers various types of financing, including on-bill, property-assessed clean energy (PACE) financing and energy efficiency loans. “The genesis of this recent funding is to take our financial products out into the country and beyond the usual suspects,” said Cisco DeVries, CEO of Renew Financial, formerly Renewable Funding.
Last year, Renew Financial received $100 million from New York Green Bank and Citi to expand its consumer lending program for energy efficiency. The company also completed its first securitization of residential PACE bonds in 2015 by issuing $50 million in privately placed notes.
PACE programs allow investments in water- and energy-efficiency retrofits and distributed renewable generation to be paid back through property taxes, which lowers the risk for both lenders and owners and can potentially open up a far larger swath of the energy-efficiency market.
The new growth capital round included Angeleno Group, Apollo Capital Management, Claremont Creek Ventures, LL Funds, Inc., NGEN Partners and Prelude Ventures.
“Financing models focused on renewable energy are undergoing a speedy evolution, from an emerging asset class to a mature one,” Paul Straub, board member for Renew Financial and managing director at Claremont Creek Ventures, said in a statement. In the past 12 months Renew Financial has gone from doing about $10 million in financing per month to about $50 million per month.
Most of the maturing with regards to PACE financing is happening in California, which leads by a long shot in residential PACE and is also ahead of other states for completed commercial PACE projects. Nearly 30 states have legislation allowing for PACE, but only about one-third of those have active programs.
Renew Financial has been working with SolarCity since last summer to bring PACE financing to small and medium-sized businesses in California for rooftopsolar The program is expected to expand beyond California this year.
Renew Financial is not solely a PACE provider, although residential PACE does make up about half of its business by volume. In New York, the $100 million from the Green Bank and Citi is a medium-term note to expand the availability of loans for energy efficiency projects. The program, ReHome New York, will offer project financing for contractors so that when they go in to replace a furnace or HVAC, for instance, they can offer a more complete package of energy-efficiency improvements with attractive financing.
In addition to New York, Renew Financial acquired Florida PACE provider EcoCity Partners in September. In October, the Florida Supreme Court removed a barrier so that PACE will be able to expand across much of the state, which it is expected to do in 2016. The company is also offering unsecured financial loans in Kentucky and on-bill financing in Illinois.
Last year, various entities laid the groundwork to see PACE and other financial products for water efficiency, energy efficiency and clean energy projects to have meaningful growth across many parts of the U.S. Residential PACE crossed the $1 billion mark for completed projects, and there’s an additional $1 billion pipeline for commercial projects.
Other momentum is setting the stage for national adoption. In 2015, the White House established new PACE guidelines through the Federal Housing Administration that should also help other states scale up residential PACE.