Morris Model Could Fund Power Resiliency
A paper by the Clean Energy Group explores a variety of financing mechanisms to increase power resiliency in the event of blackouts. According to the paper, “Resilient Power – Financing for Clean, Resilient Power Solutions,” one financing mechanism is the Morris Model, so-named because it was first developed in Morris County, NJ.
The Morris Model is a financing option in which a public entity issues a government bond at a low interest rate and transfers that low-cost capital to a solar developer in exchange for a lower power purchase agreement (PPA) price. It can substantially reduce the cost of solar power to the government entity.
Using this model, the Morris County Improvement Authority issued pooled bonds, backed by both project revenues and a county guarantee. Each of these bonds was used for renewable energy improvements made to multiple public facilities at the same time. Solar panels, owned and operated by a private developer, were installed on the public facilities, and the panels were then leased back to the public. Project revenues arose from a PPA. Additional financing for the project was added through federal tax incentives and New Jersey’s Solar Renewable Energy Certificates. The development and project performance risk resided with the private developer.
While this model was originally developed to support the deployment of solar PV, it could be adapted to support various types of resilient power technologies and applications, says the paper.
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