Energy and Project Finance and Housing attorneys at Ballard Spahr helped the Housing Authority of the City and County of Denver (DHA) bring renewable energy to 387 affordable-housing buildings across the city. This landmark public-private partnership, a Solar Power Purchase Agreement, made DHA one of the first housing authorities in the Rocky Mountain region to successfully implement such a complex, large-scale residential solar electric project.

The project involves the installation of solar power systems on more than 650 housing units owned and managed by DHA and will provide 2.5 MW of capacity. Its innovative financing structure allows DHA to buy long-term power from renewable energy sources and required no capital outlay by DHA. Denver Mayor Michael B. Hancock called the undertaking “an outstanding example of the stewardship that makes us a leader in energy-conscious cities.”

The story began in summer 2011, when DHA, represented by Ballard Spahr, issued a competitive request for proposals to solicit a private party to install, own, and operate solar electric generation systems on the buildings. DHA selected a private project developer and, with our assistance, executed a Power Purchase Agreement and Site License Agreement.

The Power Purchase Agreement paves the way for the sale of electricity at a rate roughly comparable to the current rates paid by DHA and allows for increases at a rate equal to or less than historical price increases over a 20-year term. As part of the deal structure, the project developer will make electrical upgrades to some of the units and will reinforce the roofs before installing the solar equipment.

In addition to significant utility rebates and federal tax incentives, the project developer was able to take advantage of low-cost debt financing provided through the issuance of Qualified Energy Conservation Bonds. Current rates on those bonds for borrowers with strong credit are approaching zero percent over a 20-year term.

DHA now has a fixed, predictable cost for a portion of the power it purchases over the next two decades, and will reap the environmental benefits of consuming energy from renewable resources. Add to that significant capital upgrades to its roofs and electrical systems at relatively low up-front costs, and the deal is a clear win—for residents, for the environment, for a host of businesses in the energy sector, and for our client.