Introduction
Bloomsburg Carpet Industries is a carpet manufacturer now in its third generation of family ownership. Founded in 1976, Bloomsburg still operates at its original factory location in Bloomsburg, Pennsylvania. The company’s reputation for excellence is reflected by the long list of landmark buildings adorned with Bloomsburg carpets, including Radio City Music Hall, Carnegie Hall, various state capitol buildings, the U.S. Supreme Court, and the House and Senate chambers of the United States Capitol.
Challenge:
Financing tax credits as an independent, family-owned business.
With more than 30 looms in operation at the factory, Bloomsburg Carpet requires a lot of electricity.
Increasingly, energy-intensive businesses across the manufacturing sector are turning to on-site renewable sources of energy to become more energy-efficient, particularly as the costs for solar installations continue to fall. Bloomsburg was no exception.
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Bloomsburg’s chief financial officer, Adam Bowman, had already installed a solar power generation system on his home, and had direct experience with the cost savings associated with on-site renewable energy. Bowman also sat on the local school board, which had recently joined a growing list of Pennsylvania school districts investing in on-site solar.
Bowman had been looking into how to finance a rooftop solar installation when multiple incentives aligned to improve the project’s timeline for yielding a positive return: First, the local power company, PP&L, had announced a commercial solar rebate program that would pay for a significant portion of the project’s costs—in Bloomsburg’s case, this came out to about $450,000. The second was a grant from the USDA for another $170,000. Together these covered about 30% of the project’s projected costs.
Already, Bowman explained, the project was making financial sense. But with the additional possibility of a tax-credit transfer, “it became financially a really good deal—not to mention that it’s just a good thing to do.”
As the project neared completion, Bowman initially tried to find a buyer himself—but he had trouble finding a partner who could help him navigate the required diligence process. That’s when a colleague who worked in solar development recommended Evergrow.
Evergrow first worked with Bowman to diligence the tax credits the company earned when its solar array came online, which amounted to another 30% of the project’s total costs. The Evergrow team then identified a buyer from the company’s tax investor network whose tax appetite aligned with the ITCs generated by Bloomsburg’s project. But at first, the investor balked at Bloomsburg’s status as an independent, family-owned company. If the IRS were to recapture any of the credits, the investor asked, would Bloomsburg be able to repay the amount recaptured?
Solution:
The Evergrow Guarantee
The Evergrow team knew that these were exactly the challenges that had historically stymied the financing of commercial solar projects. The team devised a solution in the form of the Evergrow Guarantee.
Evergrow conducts comprehensive diligence on every transaction, and applies the same rigorous standards to every buyer, seller, and project. All projects and sellers that meet Evergrow’s diligence standards are backed by the Evergrow Gurantee—a complete assurance to buyers that Evergrow will reimburse any losses caused by an IRS recapture event.
For the buyer, Evergrow Guarantee was enough to close the deal.
“Evergrow was on our side the whole time,” says Adam Bowman, “The Evergrow Guarantee was really essential—I don't think the deal would’ve gotten done without it.”
Results
Meaningful savings on electricity—and improved EPD scores.
After the rooftop solar array went into service, Bloomsburg started to see meaningful savings in electricity costs. On-site solar reduced the company’s electricity bills by about $200,000 per year. The company earned additional offsets from Pennsylvania’s Solar Renewable Energy Certificate (SREC) program, which would generate approximately $50,000 in annual returns.
On-site solar will also improve Bloomsburg’s energy efficiency score as part of its Environmental Product Declaration (EPD), an internationally recognized certification that allows businesses to make certified disclosures about the environmental impact of their products. A better EPD score makes Bloomsburg a more attractive manufacturer to clients who wish to source more environmentally friendly carpets.
Conclusion
With the support of Evergrow’s experienced tax-credit financing and diligence team, Bloomsburg Carpets was able to navigate the complex diligence process for commercial solar and find a buyer for the company’s tax credits—thanks in large part to the Evergrow Guarantee.
Evergrow helps small businesses, commercial real estate owners, and solar developers acquire tax-credit financing for commercial clean energy projects of any size.