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Morgan Stanley Commits $200M to Solar Projects

SAN FRANCISCO-The commitment will help Recurrent Energy cut deals with institutional real estate owners for the installation of solar arrays on their rooftops.

By Brian K. Miller | Updated on December 10, 2007

SAN FRANCISCO-Solar arrays will be popping up atop large low-rise buildings in California thanks to a new partnership. Recurrent Energy, a locally based start-up that builds, owns and operates solar power systems on its clients’ rooftops has consummated a partnership with Morgan Stanley that will give it $200 million to work with over the next few years.

Recurrent CEO Arno Harris tells GlobeSt.com the partnership is in the form of a new fund that Recurrent is managing and Morgan Stanley is capitalizing. Recurrent is in the midst of negotiating long-term, multi-building lease agreements with REITs and pension funds and, with the tenants of their buildings, power purchase agreements.

“There’s been no incentive for institutional property owners to put solar arrays on their buildings because they don’t pay for it, it’s a pass through to tenants,” a source familiar with the partnership tells GlobeSt.com. With this new business model, he says, building owners gain rental revenue and a green feature with no out-of-pocket expense, tenants get “green” power at or below their current utility rate and Recurrent gets to sell the power its rooftop equipment generates.

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