Sustainable Energy & Economic Development Fund (SEED Fund)

The Sustainable Energy and Economic Development (SEED) Fund is designed to empower public agencies to overcome barriers to clean energy adoption. With funding from the California Solar Initiative’s Research Design & Development, the SEED Fund demonstrated a business model that leverages a revolving fund mechanism to develop regional group purchases of solar photovoltaic.

Collaborative procurement of solar projects for public facilities is emerged as a powerful means to tackle the development costs and technical barriers to public investment in solar, but the upfront costs for high-quality solar potential assessments, RFP/RFQ development, and vendor evaluations still prohibit many public entities from identifying and pursuing potential projects. To overcome this hurdle, the SEED Fund team performs these front-end tasks at no upfront cost to participating public agencies, and the agencies then reimburse the SEED Fund through solar contracts that are developed with vendors. This repayment is the foundation of the SEED Fund’s demonstration of a durable financing model: a revolving fund mechanism that funds iterative rounds of collaborative procurement for public agencies.

The SEED Fund model demonstrates that a 1-2% upfront investment in municipal collaboration results in better pricing on solar systems (an estimated 10-12% total project cost savings), lower project risks with higher returns, reduced transaction costs, and reduced administrative effort (resulting in an estimated 50-70% administrative cost savings for participants) [1]. Designed and implemented by non-profit organization Strategic Energy Innovations (SEI) and its partner, Optony Inc., the SEED Fund team provides technical and logistical support to facilitate public participants’ evaluation of solar potential [2].

SEED Fund Round 1 demonstration successfully brought together 14 public agencies in Marin, Sonoma and Napa Counties to install solar panels on their public facilities. Participation in the SEED Fund allowed these agencies to bring more solar power to the region through the better pricing, lower project risks, and reduced transaction and administrative efforts that the program provides. “The result is a streamlined process and excellent energy cost savings for the participating agencies,” explains Rebecca Woodbury, a Management Analyst with the City of San Rafael, which served as the Lead Agency in SEED Fund Round 1. The SEED Fund team issued a joint Request for Proposal, involving 32 sites across 14 public agencies with a combined 6.8 MW estimated potential capacity for solar generation.

Building off of the great success of the pilot program in the North Bay Area, the SEED Fund launched a second round demonstration of collaborative procurement activities in the Monterey Bay region in early 2015. As Round 1 participants reimburse the SEED Fund for the defrayed upfront costs, the replenished funds are now being used to pay the upfront costs for Round 2 of SEED Fund activities. Public agencies in Monterey, Santa Cruz and San Benito Counties are now joining SEED Fund Round 2, where they are expected to receive the same benefits as seen in Round 1. Their reimbursement of the upfront costs for program development will in turn fund Round 3 of the SEED Fund, taking place in the Sierra Mountains in 2017-2018.

[2] Strategic Energy Innovations (SEI), is a non-profit organization dedicated to working with communities to reduce emissions and save movey through energy and resource efficiency. Optony is an independent solar consulting firm specializing in supporting public and private solar programs and projects.