Key Equipment Finance provides solar equipment financing to Providence and Worcester Railroad Company in Worcester, Massachusetts. The equipment financing company partners with solar installer Solect Energy Development and panel manufacturer ET Solar to provide the railroad company with savings from the sun.
Recent months have brought news of all kinds of businesses and institutions going solar, primarily to save money: schools, churches, farms, airports — even zoos.
Now we can add a railroad to that list.
Providing financing for some of these projects is Key Equipment Finance, one of the nation’s largest bank-held equipment finance companies and an affiliate of KeyCorp (NYSE: KEY). The company offers equipment financing and business leasing solutions to a range of business types and industries.
Key Equipment Finance announced today that it has provided solar financing for Providence and Worcester Railroad Company (P&W), a short-line freight railroad based in Worcester, Massachusetts. The equipment financing company partnered on the project with solar installer Solect Energy Development and panel manufacturer ET Solar. The solar array will generate an estimated 190 kW of electricity annually and is expected to yield significant electrical savings over the next 20 years of the solar array’s power production.
“Energy savings is an important strategy for Providence and Worcester Railroad as we invest in our business and prepare for our next forty years,” said Dan Noreck, P&W’s CFO. “Key Equipment Finance enabled us to quickly implement total solar financing for the entire cost of the solar array, allowing us to use those dollars for the infrastructure improvements that are so critical to our business.”
Key Equipment Finance provided 100% of the green energy financing with an operating lease to P&W for the solar PV system. The system was installed in December in P&W’s Worcester rail yard and adjoining properties.
“Providence and Worcester Railroad is a green-minded business that recognizes the cost-saving benefits of solar energy,” said Doug Beebe, vice president, energy finance, for Key Equipment Finance. “They are leasing the solar array to offset a portion of their increasingly high energy costs at their railroad yard.”
P&W is earning additional income from selling Solar Renewable Energy Certificates (SRECs) generated for each 1,000 kilowatt-hours of energy produced. SRECs are environmental attributes that the local utility must buy in order to meet the Massachusetts Renewable Portfolio Standard. They are somewhat controversial because of their volatile nature. And it’s often uncertain whether they actually encourage new projects and decrease fossil-fuel use. However, in some cases SRECs can encourage the creation of new solar projects. That may be the case for this project.
Another benefit of the P&W project is that when the solar lease ends and the railroad company exercises the buyout, it can enjoy the benefits of the system for the remainder of the solar array’s 25- to 30-year life. Solar PV systems have also been known to last much longer than that.
“As a full-service solar PV project developer, we help forward-thinking companies such as Providence and Worcester Railroad adopt total solar energy solutions,” said Craig Huntley, principal at Solect Energy Development. “By guiding our customers through assessment, design, construction and management of the solar PV renewable energy system, we are able to ensure they realize the full benefits of the solar array and the reduction in energy costs.”